Why Does It Take the IRS So Long to Issue Your Tax Refund?

Why Does It Take the IRS So Long

to Issue Your Tax Refund?

Is “Filter X: to Blame?

Background

Perhaps you are one of the many taxpayers who are concerned that your refund took forever to be processed by the IRS. Your tax professional instructed you to check the IRS’s website Check My Refund Status. Frustrated, you called the IRS (1-800-829-1040) and after being placed on hold for an eternity, the person who answered the phone was of little help.

If your call to the IRS was answered, you were one of the “lucky” taxpayers. During fiscal year 2019, the IRS received approximately 100 million telephone calls, but the agency’s customer service representatives answered only 29 percent of the calls.

The Reason for the Delay

Per the IRS’s Taxpayer Advocate Office (TAO) 2019 annual report to Congress, onw of the most serious problems with the IRS is its processing of refunds.

The Internal Revenue Service’s new anti-fraud filters are unnecessarily flagging millions of tax returns and delaying legitimate tax refunds for weeks or months, according to a new report from the TAO.

The report noted that during the 2019 filing season, the IRS used a new refund fraud filter known as “Filter X” that ultimately flagged and stopped the processing of nearly 1.1 million tax returns. About a quarter of those refund delays took more than 40 days to process; about one-half took more than four weeks to be processed, and a review of 309 cases by the TAO showed that 236 taxpayers had to wait an average of 141 days.

Making matters worse is the fact that the false positive rate for other non-identity theft refund fraud filters was a whopping 71 percent. That means 71 out of every 100 tax refunds stopped by the IRS’s fraud filters were ultimately determined to be legitimate.

Tax Planning Tip

Delays in issuing refunds often cause financial hardship to taxpayers who depend upon those refunds. While it is nice to receive a refund rather than owe the IRS come April 15th, when you significantly overpay your taxes you are giving the IRS an interest-free loan. The objective should be to file your tax return with an insignificant refund due you or a small balance owed to the IRS. This “break-even” can be achieved if a taxpayer works closely with their tax professional throughout the tax year to ensure that W-2 wage withholdings or estimated tax payments closely approximate the projected final taxes due.

For real estate professionals with IRS tax debt issues or tax planning issues, feel free to contact me at (610) 594-2601 or by email at info@keysolutions.us.

Bryan Haarlander, an Enrolled Agent and a Certified Tax Resolution Specialist, is an affiliate member of the Suburban West Realtors® Association, a member of the American Society of Tax Problem Solvers (ASTPS), PA Society of Tax & Accounting Professionals (PSTAP), the National Society of Accountants (NSA) and the National Association of Tax Professionals (NATP). He is the author of “How to Resolve Your IRS Tax Debt Problems” as well as a book on how to start your own business. He has been practicing in Exton for 18 years. His blogs http://www.taxexpertblog.com and http://www.stopmytaxproblems.com discuss pertinent tax and business issues.

By visiting our website you can learn about the 5 Secrets the IRS Doesn’t Share and order a FREE SPECIAL REPORT: Should You Represent Yourself or Hire a Tax Professional.

Keystone Financial Solutions, Inc. specializes in providing innovative tax planning, tax preparation, and solving IRS tax debt problems. The company’s web site is https://www.keysolutions.us and its telephone number is (610) 594-2601.

If you have any IRS tax debt issues or tax planning issues, feel free to contact me at (610) 594-2601 or by email at info@keysolutions.us.

Disclaimer: Content in this blog is for educational purposes only and should not be considered as the rendering of tax, legal or investment advice. The publisher of this blog makes no representations as to the accuracy or completeness of any information herein, will not be liable for any errors or omissions, and shall not assume liability for any losses, injuries, or damages from the display or use of this information. Should you wish to engage our firm to represent you, please call us at (610) 594-2601.