• The IRS is continuing to fall behind on processing millions of tax returns
• Will this delay your potential refund?

Hey IRS, Keep Up!

It’s no news that the IRS is a bit behind the 8-ball this tax season; they’ve been falling behind since last year’s filing season and still have yet to catch up. The Treasury Inspector General for Tax Administration (TIGTA) issued a report that the IRS has still yet to process 8.3 million returns from last year alone.

Additionally, an estimated 31 million returns are being held for manual processing ahead of the May 17 deadline. Typically, the IRS sends most refunds out within 21 days or fewer after a taxpayer has filed, but this year, like last year, has been an exception to the norm.

What’s Causing the Delay?

One reason the IRS is backlogged could be the “income lookback” rule which allowed taxpayers to calculate their eligibility for Earned Income Tax Credit or the Additional Child Tax Credit by using figures from their 2019 returns on their 2020 returns. The IRS’s computer systems could not be updated ahead of this year’s tax season, thus a manual review will be required.

Erin Collins at Taxpayer Advocate Service says of the delay: “Due to the late passage of the law, the IRS was unable to timely adjust its forms and computer systems before the start of the filing season to allow for systemic processing of returns where taxpayers elected to use 2019 income.”

Stimulus check distribution is also undergoing a manual review process. Returns with inconsistencies between IRS’s record for stimulus checks and recovery rebate claims are taking especially longer.

Another major factor to consider is the delayed start to this year’s tax season on February 12.

What’s The IRS’s Plan?

Any returns filed that need verification of the 2019 lookback or recovery rebate credit corrections are being moved to the IRS’s Error Resolution System (ERS). This places such returns on hold until more staff within the IRS become available.

Worried about the delay? Don’t be! That’s what our tax professionals are here to help with. Call our offices at 516-541-6549 with questions and visit our website for a full list of our services.

Devin McQuillan
Associate, Creative Solutions

516-541-6549 | Email

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