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WHAT TO EXPECT FROM THE IRS

In a recent announcement from IRS, Commissioner Chuck Rettig stated that the pandemic continues to create challenges for the agency. Pandemic mitigation measures, personnel shortages, budget constraints, mail processing backlogs, and constant shifting of priorities – e.g., mailing stimulus payments and managing the advance child tax credit payments to taxpayers – have created a ripple effect of increasing delays throughout the IRS. The delays are creating confusion and frustration for taxpayers and practitioners alike. It’s frustrating for the IRS too.

Tax practitioners are keenly aware of the delays. The halcyon days of waiting on the practitioner priority phone line to speak with someone at the IRS have been replaced with a courtesy disconnect (you are asked to call back later, then the call is disconnected), creating more delays in resolving taxpayers matters. With that being said, if you are lucky enough to get through to the IRS, they are quite helpful. (Business Insider has an interesting article on the IRS here: https://www.businessinsider.com/irs-tax-season-problems-ahead-delayed-refunds-2022-1; one person at IRS for every 16,000 calls!)

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Refund Delays

Average taxpayers are feeling these delays more frequently, especially in processing refunds where paper returns are required to be filed. Practitioners receive dozens of calls from tax clients asking, “I haven’t received my refund yet, can you check the status of my return?” There’s no good answer. Although the IRS has a tool on its website where you can check your refund status, it does little more than tell you it is in process.

As of December 3, 2021, the IRS has processed nearly 169 million tax returns. All paper and electronic individual 2020 refund returns received prior to April 2021 have been processed – if the return had no errors or did not require further review.

2021 Tax Return Filing: What You Can Do

The Internal Revenue Service announced that the nation’s tax season will start on Monday, January 24, 2022, when the tax agency will begin accepting and processing 2021 tax year returns.

Commissioner Rettig reminds people that there are important steps they can take to help ensure their tax return and refund don’t face processing delays. First, file electronically with direct deposit and avoiding a paper tax returns if possible.

Second, have documentation concerning your Economic Impact Payment or an advance Child Tax Credit for 2021. Make sure these payments are reported correctly on tax returns. The IRS is mailing special letters to recipients with the amount of payment, and you can also check amounts received on IRS.gov.

Even though you are not otherwise required to file a tax return, you will need to file a 2021 return to claim a Recovery Rebate Credit to receive the tax credit from the 2021 stimulus payments or reconcile advance payments of the Child Tax Credit.

Third, as always, gather all of the tax information needed to provide your tax practitioner to make sure they file a complete and accurate return. Having an accurate tax return can avoid processing delays, refund delays, IRS adjustments and later IRS notices.

2021 Tax Return Filing Deadline

The filing deadline to submit 2021 tax returns or an extension to file and pay tax owed is Monday, April 18, 2022, for most taxpayers. The due date is April 18, instead of April 15, because of the Emancipation Day holiday in the District of Columbia for everyone except taxpayers who live in Maine or Massachusetts. Taxpayers in Maine or Massachusetts have until April 19, 2022, to file their returns due to the Patriots’ Day holiday in those states.

Don’t wait, get your tax information to your tax preparer ASAP!

(See this article from the Journal of Accountancy touching upon Practitioners concerns regarding IRS service lapses as tax season begins: https://www.journalofaccountancy.com/news/2022/jan/practitioners-wary-irs-service-lapses.html)


SASSY SAYS

Sassy: Did you know that the Katten Kabinet in Amsterdam is a museum of cat-related art inspired by the museum’s founder’s cat, J.P. Morgan? There’s a Pomeranian State Museum, but I didn’t see any of my relatives there.

Posted in Senior Law News