Many taxpayers are waiting for refunds in a tough tax year.
Millions of paper tax returns piled up while the IRS was out of the office during the worst of COVID, and the agency has yet to catch up.
If you’re still waiting for your tax refund, you’re not alone. Even though getting people their refunds is a priority for the Internal Revenue Service, the agency has been behind in handling tax returns for two years. According to University of South Carolina accounting professor Dr. Donna Schmitt, the IRS also is one of the many victims of COVID, along with the millions of individuals hurt by the pandemic.
This year’s tax season was predicted to be a bad one, said Schmitt. “I think the reason that people thought that this would be a really bad year is because the IRS isn’t done processing last year’s tax returns,” she said.
“They’re still processing paper returns that were submitted for the 2021 tax filing season for the 2020 tax returns. They got very backlogged during the pandemic because they had a number of months where they weren’t going into the office. And anything that’s submitted to them on paper has to be manually processed. Someone has to transcribe them. It’s one of the issues that the IRS has in terms of not having modernized their technology, mostly due to funding issues.”
That lack of funding, said tax accountant Jeff Nates, is a result of politicians’ funding more appealing issues than technology and personnel for the IRS. Despite being the agency that brings in the nation’s revenue, the tax office, he said, is boring on the campaign trail.
“If you’re running for office, there’s only a couple of things you want to talk about. ‘I’m gonna get tough on crime, we’re gonna cut taxes, and we’re gonna talk about term limits.’ Nobody wants to talk about IRS budgets,” said the veteran tax preparer. “Sure, everybody wants to catch the tax cheats, but that’s not gonna get you votes. The latest administration was talking about increasing the budget 15 or 16 percent. Then this little war came out in Ukraine and everything got sideways, and the last I saw that big increase to the IRS budget’s now down to about six percent, and the only thing it’s being directed toward is taxpayer assistance, basically.
“Defense is a hot budget. IRS, no. It’s just the way it is.”
For those who deferred filing their returns until October, Schmitt advised that if at all possible, filing electronically is the best thing to do, because it’s quicker and the computer program does all the math for you, so mistakes in figuring are avoided. She offered another valuable tip: if you have questions, don’t call the IRS on the phone.
“That should really be a last resort if you have a question,” said Schmitt. “The IRS has an amazing amount of information on its website, and normally when I want to know something, if I just Google the question, the first thing Google sends me to is an IRS webpage that has that information.” To emphasize the futility of attempting phone contact, she provided a surprising statistic. “They had almost 200 million phone calls in the first half of 2020. There’s no amount of staffing you can have to deal with that kind of volume.”
Nates said there’s no telling when people who haven’t yet received their refunds will get them. “No real schedule. When they get to it. They’re understaffed,” he commented about the disruption caused by the pandemic. “Information is being punched in wrong because taxpayers don’t know to keep up with some of this stuff. It’s just a hot mess, and eventually the money will come, they will pay you interest on it. But, timetable? No.”
Nates believes it will take a couple of years before the IRS is caught up and running more smoothly, but Schmitt was a bit more optimisitic. “Recently the IRS commissioner said he expects their paper backlog to be resolved by the end of this year, so that when we go into the filing season next year, there won’t be people who haven’t had their returns processed yet.”
Both tax experts advised people to be patient, because despite being underfunded, understaffed and underequipped, they said, the IRS is doing the best it can under trying circumstances.