The IRS normally processes millions of returns and refunds in a timely manner, but unfortunately many tax filers and business continue to face extended delays, sometimes weeks or months after filing.
So during and after tax season here are five key items you need to be aware of as you file your taxes, wait for your refund payment or need help from the IRS.
Despite ongoing system and staffing issues, the IRS has committed to stick to a standard tax season on schedule. See key dates in the upcoming tax season.
However given all the expanded tax credits and stimulus payments introduced and paid over the last year, it is taking a while for the IRS to process refunds from current and past years. So file early and accurately using reputable tax software.
IRS Refund Schedule
Once the IRS starts processing your tax return (return accepted), most people can expect to get their refund within 21 days.
The exception to this is those claiming the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC), for which the IRS has announced it will hold payment of refunds for about three weeks in order to perform further identity verification checks. This is due to the mandated PATH act, which lifts in mid- to late- February,
Here is the estimated refund payment schedule (based on valid returns being accepted) for the previous and current tax season, but remember that you should wait at least 21 days before contacting the IRS with any refund payment or delay questions.
Getting Help From a Real IRS Representative
So you filed early, did all the right things and kept checking IRS.gov for online resources to help with your return. But to no avail and you now need to talk to real person at the IRS to get help with your return processing and/or refund payment.
A recent Taxpayer Advocate Service report stated that the IRS is seriously struggling to meet the service needs of U.S. taxpayers, particularly with regard to telephone service. Of the 73 million calls only 10% or 1-in-10 reached a live IRS agent.
The IRS themselves estimated that during peak tax season (January to April) wait times to get a live agent can take over 15 minutes. IRS phone lines are generally open Monday through Friday from 8 a.m. to 8 p.m. local time.
In some cases or for complex situations, like with amended returns which require manual reviews, it is taking more than double that time. The busiest times are Mondays and Tuesdays, and at the start and end of tax season.
Outside of the regular tax season (May to December), the wait times are actually longer with fewer agents. The IRS says the average wait time is around 20 minutes during these times, with peak times earlier in the week. So call later in the week and earlier in the day (8am local time).
The IRS has recognized that this has been an ongoing taxpayer concern and to alleviate long lines at in-person IRS centers from a first come, first served approach, they have now instituted formal appointments to get in person support.
To schedule an appointment at a IRS Taxpayer Assistance Centers (TAC) taxpayers can call 844.545.5640 or use the TAC tool to find a location near you. Hopefully this means you can get helpful in-person support without having to wait for hours in a long line.
Finally, the IRS has received funding under the Inflation Reduction Act to hire thousands of new call entre representatives, IRS reviewers/agents and upgrade systems. This should improve response times and hopefully alleviate processing delays/payments.
Check Your IRS Cycle Code and Transcript
One way to see what is happening with your return and when your refund direct deposit could be paid is to check your tax transcript processing cycle code.
In fact, many filers facing extended refund payment delays are turning to their free online tax transcript and IRS cycle code to figure out what is happening with their refund processing status.
By figuring out which IRS batch processing cycle they are in and interpreting the various transcript transaction codes, they are able to get an insight into why their refund may be delayed (TC 570 or 203)and when their refund could be issued (TC 846).
See more in this video on how to interpret your IRS transcript and cycle code.
Tax Return Fraud and Identity Validation
In addition to holding returns for further validation with EITC or ACTC refunds due – which have a high correlation to fraudulent returns/refunds – the IRS requires taxpayers who self-prepare returns using a tax software filing product for the first time to provide their Adjusted Gross Income (AGI) amount from their prior-year tax return to verify their identity.
If you have filed a prior year return, but still waiting for it to process then enter $0 for the prior year’s AGI.
The IRS has also instituted other verification and e-sign procedures, so don’t be surprised if your return is flagged for further verification. While this may hold up refund payments, it will at least mean that the right people are getting their refunds.
If you are required to validate your identify you will get a letter and IRS number to call. It is important to promptly follow instructions in the letter to confirm your identity to get your refund released.
Responding IRS Notices and Letters
It is also important to make sure you open, read and action IRS notices sent to you before, during and after tax season.
These official IRS notices or letters can provide valuable information for your filing, but also provide reasons why the IRS has adjusted your refund or actions they need you to undertake to get your refund released.
For example if you received advance child tax credit (advCTC) payments you would have gotten Letter 6419 for the amounts you received.
You would need the amounts noted for your tax return filing and if an incorrect amount was entered, the IRS will most likely flag your return for further reviews which will result in delays well beyond the standard processing time.
File For Free
Did you know that if your income is below a certain threshold you can actually e-File your taxes for free? Thanks to the IRS Free File program with major tax software providers, they provide a free version of their tax filing software for millions of taxpayers with incomes below a certain level.
So if your income is below this, expect to file your taxes for free. Note that if your tax filing gets complicated or you need additional support, you will likely have to pay extra. You can also request advance refund loans if you qualify.