Friday, January 21

Many still do not receive a refund from the IRS because agency accumulates 35 million raw tax returns


IRS Commissioner Charles Rettig at a federal Senate finance committee hearing on June 8 to discuss the agency’s budget.

Foto:
Tom Williams-Pool / Getty Images

If you are still waiting for the tax refund for this tax season from the Internal Revenue Service (IRS), it is possible that your tax return is still waiting to be processed and is part of the 35 million accumulated returns in the agency.

A report from the Erin Collins National Taxpayer Advocate Service indicates that the delays are due to several factors including fdischarge of personnel due to the aftermath of the pandemic as well as the challenge posed by the disbursement of funds from the different programs under the “Economic Rescue Plan” that the IRS has had to process.

A tax “perfect storm” at the IRS

Although Collins called the situation at the agency a “perfect storm,” he acknowledged the tremendous effort of the staff.

Apart from the approximately 136 million tax returns processed this yearThe entity has had to redouble its efforts to comply with the remittance of the stimulus checks of the three rounds approved in the federal Congress since March of last year.

In addition to this, the IRS is focusing efforts on the distribution of monthly checks under the Biden Administration’s “Child Tax Credit” extension as of July 15.

The IRS and its employees deserve tremendous credit for what they have achieved under these difficult circumstances, but there is always room for improvement, “wrote Collins in his report” Objectives Report to Congress. “

“This year, the IRS is dealing with an unprecedented number of returns that require manual review, delaying the issuance of refunds,” the advocate continued.

“These processing backlogs matter too much because most taxpayers overpay in taxes during the year through wage withholding or estimated tax payments and are entitled to reimbursements when they file their returns. Furthermore, the Government uses the tax system to distribute other financial benefits ”, added the expert who also specified that the 35 million are equivalent to 20% of the returns submitted to the IRS.

IRS does not give clues of refunds under exemption of $ 10,200 in payment of unemployment taxes

It is likely that among the accumulated documentation are the returns of taxpayers who are eligible for the tax exemption of $ 10,200 for payment of unemployment taxes as a result of the third stimulus bill.

At least 13 million Americans are eligible for the special refund that requires adjustments by IRS staff.

Since June 4, the entity has not updated the information on the course of this procedure and the review of the corresponding declarations.

Although a second batch is supposed to be sent by mid-June, July has already started and the office has not yet clarified what status the process is in and if they have sent more reimbursement for the tax exemption.

By the beginning of June, the IRS had reviewed more than 3.1 million returns and sent some 2.8 million payments to taxpayers.

But after those figures, no news has been released about the beneficiaries who have received the reimbursement under the provision approved last March as part of the “American rescue plan.”

The 2020 $ 10,200 Unemployment Compensation Exemption from Income applies to those who earned less than $ 150,000 in adjusted gross income. This benefits taxpayers who paid taxes on the unemployment compensation they received during 2020 and that the new legislation now excludes as income.

“You are eligible to exclude unemployment compensation if you received it in 2020 and your modified adjusted gross income (AGI) is less than $ 150,000. The AGI modified for the purpose of qualifying for this exclusion is your 2020 adjusted gross income minus the total unemployment compensation you received. This limit remains the same for all tax states, regardless of whether you are married and file a joint tax return (it does not double to $ 300,000), ”the office explained.

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