Another tax year is underway and once again the familiar story of American tax payers facing longer than expected delays in getting their refunds is playing out. Some of the reasons are a repeat of last year, but some new ones are emerging.
With that in mind here are the top 5 reasons why your tax refund could be delayed this tax filing season:
Past Identity and Fraud Checks
Due to the ongoing cyber attacks (domestic and international) the level of identity checks continues to increase every year. Those with issues in the past will face even higher hurdles to prove their identity and will more likely than not face delays in getting their tax refunds. If this is you, then expect a long delay again this year.
Claiming the EITC or ACTC = Delayed Refund due to PATH ACT
This issue has been persisting for the last few years and the IRS has been mandated by law (PATH act) that it cannot release refund payments for returns claiming these two popular tax credits. At this stage, processing schedule estimates are predicting a mid February to early March release of refund payments that include these credits. See more in this video.
Obvious Filing Mistakes
This includes items like missing names/SSN, incorrect bank account details or forgetting to sign your tax return. According to the IRS, one of the main things causing people to experience delays in getting their refunds is returns that are not accurately completed. That is why e-filing using tax software is a good idea, because if catches a lot of these issues.
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The best way to address this is to resubmit an amended tax return entering the changes and explaining why you need to amend your original tax return. You don’t have to redo your entire return, either. Just show the necessary changes and adjust your tax liability accordingly.
You usually do not need to file an amended return because you forgot to include tax forms such as W-2s or 1099 forms. The IRS normally will send a separate request asking for those documents.
IRS System Processing Delays (especially for early filers)
Due to budget constraints, increased tax credits and pandemic related staffing shortages the IRS has faced a growing backlog of tax returns to process. This has meant that IRS processing times are delayed well beyond widely published processing guidelines. So file early and accurately to maximize getting your refund on time.
Early filers, expecting a refund, normally get hardest hit by IRS processing delays. The message below (from IRS2Go) is an example of some of the issues being seen.
A lot of earlier filers – including those who filed before the start of IRS tax processing – are seeing this because the IRS is expecting to take more than 21 days (normal time frame) to process your return.
Not something to immediately worry about, but just expect a delay in getting your refund.
Issues with your Accountant or Tax Preparer
Most people get help filing their taxes, either from computer software or a tax professional. But you need to get someone trustworthy or else your return will be flagged . This mean making sure they are properly registered and have a tax preparer tax identification number (PTIN) from the IRS.
The IRS also has a Directory of Federal Tax Return Preparers with Credentials and Select Qualifications that shows preparers in your area who currently hold professional credentials recognized by the IRS, or who hold an Annual Filing Season Program Record of Completion.
Also look for advanced credentials like a CPA or enrolled agent status who can help with more complicated tax matters and get you answers in a more timely fashion.
What can I do to resolve delays and get my refund!
If you are within 21 days of filing, then you will just need to monitor the status of your filing and refund payment via WMR or IRS2Go app. You can also check your tax transcript. Other than, calling the IRS won’t help since you within their normal processing time.
Some readers have also suggesting calling the IRS reconciliation department on (866) 682-7451 (Ext. 568).
Which ones apply to you? If not in the list above or you just want a place to vent, leave a comment below.