Tax Refund Delays: What You Need to Be Aware Of
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The Internal Revenue Service (IRS) is now dealing with a heavy workload, which may cause delays in processing tax refunds. Despite processing over 91 million individual returns and giving over 68 million reimbursements, the government still has over 29 million returns that require human processing.
This backlog includes more than five million reimbursements from 2019 and 2020 that were lodged on paper. If you’re one of the many people waiting for their tax refund, you’re not alone.
The IRS blames the delays on workforce shortages and problems in addressing processing concerns caused by the pandemic. Last-minute tax changes imposed by a new presidential government complicate matters even more. Aside from internal IRS concerns, a variety of additional circumstances, including some under your control, can contribute to return delays.
Here are a few reasons why your tax refund could still be pending:
1. Incomplete Information: Minor errors like missing ZIP codes, unsigned forms, or incomplete fields might cause major delays in processing. Review your tax return carefully for accuracy, especially if you are filing on paper.
2. Bank Account Issues: By providing appropriate banking information, you may ensure that your return is direct deposited on schedule. To avoid processing delays, bank account changes must be disclosed to the IRS quickly.
3. Claiming Covid-19 Items: Tax law changes relating to the pandemic may require further verification by IRS staff, resulting in processing delays for anyone claiming associated credits and deductions.
4. Back Taxes: Outstanding tax debts might balance your planned refund, resulting in a lower or no refund at all. To prevent further fines and interest, pay back taxes on time.
5. Identity Theft/Fraud: Tax-related identity theft can result in fraudulent refund claims or the rerouting of funds to unauthorized accounts. Filing early and tracking refund status can help to prevent and resolve such complications.
6. Mail Delays: While the IRS strives for quick processing, postal delays might increase the time it takes for a refund check to arrive, especially if you chose mail delivery.
7. Filing a Paper Return: Compared to paper filing, electronic filing speeds up processing and reduces refund wait periods. Using digital filing methods results in faster processing and refund issuance.
8. Other Debts: Refunds can be allocated to a variety of outstanding debts, such as child support, school loans, and unpaid taxes, lowering or delaying your return.
9. Security Measures: If the IRS detects suspicious activity or inconsistencies, returns may be delayed, necessitating further verification procedures.
10. Form 8379: Processing delays are usual when using the injured spouse allocation form, which might take weeks to resolve complex tax circumstances involving past debts or commitments.
11. Audit: Refunds may be delayed if your return is selected for audit, which requires a comprehensive investigation and may result in the challenging or reduction of refund amounts.
Overall, provided you filed your taxes correctly and on time, you should be receiving your return soon. Patience and proactive monitoring of your return status using IRS resources will help you detect and resolve any potential issues quickly.
Editor-in-Chief • Industry Trends Writer
Ethan analyzes market shifts and predicts future developments in different industries to keep his audience well informed and ready.
