Contributed by: Peter Ventra, CPA, Partner
Are you one of countless U.S. taxpayers wondering where your 2020 refund is? We feel your pain.
COVID-19 is in the rear-view mirror for many. Unfortunately, the Department of Treasury, more specifically the Internal Revenue Service, is struggling to get back on track and is and will remain impacted for many more months. In a normal year, refunds were generally processed within 2-4 weeks of filing. However, 2021 is not normal, but then again, neither was 2020.
Many have waited too long for their refunds and can’t understand why they are taking so long, but keep in mind the IRS stated in the early fall of 2020 that it had well over 10 million unopened returns to process. Coupled with added stimulus payments, changes in tax laws, and working restrictions, and you have a perfect storm for delays.
Historically, taxpayers have been able to use the IRS’s site, “Where’s my Refund,” to find out the status of their refund, but this year many taxpayers continue receiving only an update claiming their return is “in process.” At a time where some are financially struggling, this doesn’t provide any comfort nor any answers of when they will receive their money.
In some instances, we have contacted the IRS only to experience long wait times and to confirm that their return is “in process.” The fact is, there are multiple answers as to why your refund is taking this long. The reasons provided by the IRS are COVID-19, higher-than-normal fraudulent activity, 2019 paper filing backlog, computer upgrades, or changes in tax law. The real question is which reason (or reasons) are true? Unfortunately, this is unknown to both the professionals and the IRS.
What can you do? Normally, we are here to help our clients expedite questions and answers to the IRS, but these are new times, and as you’re helpless, we are too. Our message to our clients is to be patient. Hopefully, the IRS will speed up its activities of processing refunds. In certain instances, you can request a hardship. However, this likely will not be processed timely as the IRS is an official log jam.