Millions of American taxpayers are still waiting for the IRS to process their federal tax return and are waiting to receive their refunds, according to a new report by National Taxpayer Advocate Erin Collins.
Collins said in a report to Congress that the IRS had a 4.7 million return delay for fiscal year 2019 in mid-May, which is delaying refunds for many.
“Taxpayers who filed a 2019 paper return and are entitled to refunds can expect a long wait,” Collins said in the report.
This year’s tax filing season has been tumultuous for both taxpayers and the IRS due to the coronavirus pandemic. While the filing deadline was delayed from April 15 to July 15, taxpayers have had fewer IRS resources available this year because the agency closed many of its help lines and centers.
Collins noted the lack of help for taxpayers, noting that “the only resources available were IRS.gov and automated phone lines.” That was frustrating for many taxpayers eager to determine when they would receive their refund, he reported.
“While the vast majority of taxpayers file their returns electronically, taxpayers who file paper returns are experiencing extreme delays in processing their returns,” the report noted. “Many taxpayers face financial difficulties associated with the COVID-19 crisis and need the IRS to process their paper returns as soon as possible and release their refunds.”
The IRS did not immediately respond to a request for comment.
Collins noted the other problem with delays is that it could affect taxpayers. federal stimulus check. This is because the IRS relies on taxpayers’ tax return in 2019 or 2018 to calculate their “economic impact payment,” the official term for payments. Stopping the processing of 2019 tax returns “caused confusion for many taxpayers” in determining their eligibility for payments, he said.
Incorrect stimulus controls
In that regard, “many people” have not yet received a stimulus check to which they are entitled or have received a lower payment than they should have received, Collins said.
It did not specify the number of taxpayers affected by incorrect amounts of stimulus checks, but earlier this month the United States Government Accountability Office said that up to 450,000 people did not receive payments of $ 500 for children who qualified for the benefit.
Among the most common reasons for problems with stimulus testing They are:
- Taxpayers who received tax refund “advance loans” from tax preparers, which meant the IRS may not have had their bank account information.
- Stimulus payments that were deposited into the wrong bank accounts.
- Individuals who did not receive their $ 500 stimulus payments for children under the age of 17.
People will receive the adjustment on their stimulus checks next year, when they file their returns for fiscal 2020. This is because the stimulus payments are effectively an advance on a 2020 tax credit, which means the IRS will verify whether taxpayers got their full credit when they file their 2020 taxes.
That delay has been criticized by some lawmakers. “Families struggling in New Hampshire cannot wait until 2021 to receive the full stimulus payments they are entitled to by law,” New Hampshire lawmakers wrote in a letter to the IRS and Treasury last month.
Collins, the taxpayer advocate, agreed with that assessment, noting that Americans “are probably experiencing financial difficulties.” now“
“The National Taxpayer Advocate recommends that the IRS continue to work on solutions and alternatives to ensure that everyone receives the EIP in full by 2020 instead of having to wait until 2021 when they file their 2020 tax returns,” Collins wrote. .
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