Tax season is stressful for many consumers in the best of times, but 2020’s pandemic has heightened those anxieties.
It’s mid-year already. Do you know what ever happened to your income tax refund or your return?
Plenty of people like Charles and Anna Letner are still waiting to learn the fate of their 2019 federal return and expected refund.
The retired Phoenix couple said they have always completed their returns on paper and mailed them in, rather than preparing and submitting returns online. There’s nothing wrong with that, though the Internal Revenue Service for years has extolled the virtues of online filing, claiming it’s both faster and more secure. That certainly has been the case during the coronavirus pandemic, which shut down large swaths of the economy — and much of the IRS.
The Letners mailed their paper return in late February, well in advance of this year’s original April 17 filing deadline, yet still have no answers.
The couple said they checked the “where’s my refund” tool at irs.gov on several occasions but didn’t learn anything.
“Each time the automatic response is ‘There is no information about your refund,’ and after the double check for accuracy of information, it automatically hangs up,” they said in an email.
They also tried calling the IRS but haven’t been able to connect with a live person. Similarly, two letters mailed to the agency have gone unanswered.
“We do understand that the virus has caused great delays,” the Letners said. But they’re concerned that their return might have gotten lost in the mail or misplaced. They hope to receive an answer prior to this year’s extended July 15 filing deadline.
“We certainly don’t want to pay a late fee,” they said.
As the Letners surmised, IRS staff is well behind in processing outstanding tax returns from 2019, especially paper ones.
“The disruption caused by COVID-19 and the postponed due date had — and continues to have — an enormous impact on the 2020 filing season, reflected in the number of returns received, the volume of correspondence received from taxpayers and toll-free telephone service,” said the Taxpayer Advocate Service, an IRS watchdog group, in a late June report to Congress.
IRS operations curtailed
The service disruptions, which date to around March 20, have come in several forms:
- Widespread IRS office closures, with reduced staff to answer phone calls or meet taxpayers in person.
- A large and growing backlog of incoming mail. The Taxpayer Advocate Service estimated 4.7 million paper returns hadn’t been processed as of May 16, and more will arrive ahead of the new July 15 deadline.
- Shutting down of the National Distribution Center, which deprived many taxpayers of pre-printed tax forms.
- Mistaken refund delays over fraud or identity theft concerns. The IRS normally requires taxpayers to provide additional documentation when it spots a potential problem. But due to office closures, the IRS has been slow to process such responses and release legitimate refunds.
- Closing of many of the schools, community centers and other outlets where lower-income taxpayers normally could receive free filing help through the Volunteer Income Tax Assistance and Tax Counseling for Elderly programs.
As of April 17, the original filing deadline, the IRS had processed 24 million fewer returns than it had last year, the Taxpayer Advocate Service said, though some of that reduced flow reflects the three additional months to file this time around, owing to the coronavirus pandemic.
The IRS on June 30 updated the status of its operations, noting that services including “live assistance on telephones, processing paper tax returns and responding to correspondence continue to be extremely limited.”
The update advises taxpayers that paper returns will be processed in the order received and discourages anyone from filing duplicate returns or contacting the IRS over the status of returns.
Incidentally, the Arizona Department of Revenue said it continues to process tax returns, payments and refunds with no reported delays. More than 2.8 million individual state returns have been filed, with taxpayers receiving refunds on average in nine days for electronic returns and 14 days for paper.
Multiple coronavirus challenges
The pandemic and social-distancing measures to safeguard IRS staff haven’t been the only obstacles facing the agency. On top of the normal workload, the IRS this year also was tasked with administering new programs such as the enormous push to get stimulus or “economic impact” payments to the public, all while most IRS employees were working remotely.
“Given the time-sensitive nature of the payments, the IRS had to pivot, in the middle of filing season and without full staffing, to develop processes and procedures and perform system changes that would allow for the quick release of (stimulus payments),” the Taxpayer Advocate report said.
“Although there have been glitches, the IRS should be commended for timely issuing nearly 160 million payments (through June 3), even with its software-programming language that dates to the Kennedy administration.”
More than 90% of individual returns normally are filed electronically, though that still leaves millions of taxpayers potentially facing delays like the Letners have encountered.
“Many taxpayers experienced a sudden change in their financial status and either desperately needed their tax refund to pay bills or suddenly could not pay their tax liabilities,” the report said.
“At the same time, taxpayers could not contact the IRS in person or by phone for months, and their mailed correspondence and paper-filed returns sat unopened and unprocessed or were even returned in some instances.”
Technology upgrade is needed
The Taxpayer Advocate report estimates the IRS generated more than 20 million notices that could not be mailed due to closure of notice-production centers between April 8 and May 31. The IRS has started to mail notices again, but some of the backlogged messages include outdated information.
“Taxpayers who receive these notices may be confused and distressed, believing they missed response deadlines,” the report said.
The watchdog group urged IRS officials to plan for the next emergency to avoid some of the problems faced during the coronavirus pandemic. Suggested remedies include updating computer systems to revamping telephone services so that staff can handle phone calls remotely.
“The IRS needs to improve its infrastructure, hardware and software to continue its mission-critical operations if another situation arises so that taxpayers do not have to put their lives on hold,” the report said.
Reach Wiles at email@example.com or 602-444-8616.
Read or Share this story: https://www.usatoday.com/story/money/2020/07/05/irs-tax-returns-backlog-refund-checks-due-covid-19-pandemic-coronavirus/5379821002/