Are You Concerned that Your Refund was Lost or a Victim of ID Theft?
Perhaps You Filed Your Return in April, May or June, and You Still Have Not Received Your Refund. You are Understandably Eager for Details When You Will Receive It (and if you will receive it).
Key Facts to Better Understand the Refund Process
The IRS reminds taxpayers in its IR-2020-161 release that there is no secret way to find out when a refund will be issued.
Some key facts can help people understand the refund process better:
Taxpayers who file electronically and use direct deposit can expect their refund faster than those who mail a paper return, especially since the COVID-19 outbreak has reduced IRS staffing available to process paper returns.
Taxpayers who file a paper tax return are likely to face processing and refund delays.
The best and easiest way to check on a refund is “Where’s My Refund?”
A tax refund’s status can be checked within 24 hours after the taxpayer receives the e-file acceptance notification.
“Where’s My Refund?” is updated once a day, usually overnight. Thus, you checking your refund status multiple times every day is a waste of your time and further adds to your frustration.
Read our January 22 post regarding Filter-X which is the IRS’s filter to identity fraudulent returns and is causing on average delays of 141 days
Taxpayers who claim the Earned Income Tax Credit, the Child Tax Credit, and the American Opportunity Tax Credit for educational expenses will have their returns delayed as returns which claim these credits face additional IRS scrutiny due to past fraudulent practices by some taxpayers
Processing delays for paper tax returns
The IRS continues to process electronic and paper tax returns, issue refunds, and accept payments.
The IRS is experiencing delays in processing paper tax returns due to limited staffing. This is causing refund delays. Taxpayers who have already filed a paper return should know that the IRS is processing paper returns in the order in which they are received. Keep in mind that the IRS was closed for a couple of months and those mailed returns were sitting in tractor trailers waiting for IRS employees to return to work.
Interest on individual 2019 refunds reflected on returns filed by July 15, 2020, will generally be paid from April 15, 2020, until the date of the refund. Interest payments may be received separately from the refund and are considered taxable income in the year received.
Taxpayers who filed a paper return should not file the same tax return again.
Common myths about tax refunds include:
Getting a refund this year means there’s no need to adjust withholding for 2020
To help avoid a possible surprise next year, taxpayers should look to make changes now. Adjusting tax withholding with an employer can help ensure that neither too much nor too little tax is withheld from an employee’s paycheck. The Tax Withholding Estimator helps taxpayers figure out the right amount.
Calling the IRS or a tax professional will provide a better refund date
Contacting the IRS or a tax professional will not expedite a refund. IRS assistors and tax professionals cannot move up a refund date nor do they have access to any “special” information that will provide a more accurate refund date.
Ordering a tax transcript is a secret way to get a refund date
Ordering a tax transcript will not help taxpayers find out when they will get their refund and it does not accelerate the issue date of a refund.
The ‘Where’s My Refund?’ tool is wrong because there’s no deposit date yet
When Where’s My Refund? shows the tax return status is received it means that we have received the tax return and are processing it. Some returns may take longer to process than others and need further review. This includes when a return:
Is affected by identity theft or fraud; or
Includes a Form 8379, Injured Spouse Allocation, which could take up to 14 weeks to process
Taxpayers will be contacted by mail if the IRS needs more information to process a tax return. People waiting for a refund in the mail should plan for the additional time a check takes to arrive.
Is something wrong when the refund amount is less than expected?
There are a lot of reasons that cause a tax refund to be different than expected. Situations that could decrease a refund include:
Taxpayer math errors or mistakes;
Owing federal or state taxes, child support, student loans or other federal non-tax obligations; or
A portion of the refund is held while IRS reviews an item claimed on the return
The IRS will mail a letter of explanation if these adjustments are made. Some taxpayers may also receive a letter from the Department of Treasury’s Bureau of the Fiscal Service if their refund was reduced to offset certain financial obligations.
Taxpayers can call the IRS’s automated refund hotline at 800-829-1954, which uses the same information as “Where’s My Refund?”. There is no need to call the IRS unless “Where’s My Refund?” says to do so.
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 over pay 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.
If you would like to discuss your business or personal tax planning, tax preparation and other financial concerns with an experienced tax professional, we invite you to call 610-594-2601 today to make an appointment at our Exton PA CPA office to discuss your situation. You can also schedule a consultation at Click Here.
About F. Bryan Haarlander, EA, CTRS:
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 19 years. His firm serves clients in the western suburbs of Philadelphia, PA, which includes the cities of Chester Springs, Coatesville, Collegeville, Devon, Downingtown, Exton, Frazer, King of Prussia, Paoli, Philadelphia, Phoenixville, Pottstown, Radnor, Reading, Wayne, West Chester in Berks, Chester, Delaware, Montgomery and Philadelphia Counties, as well as clients in Delaware, New Jersey, New York and throughout the continental USA.
For individual tax payers, real estate professionals, contractors and other self-employed individuals with IRS tax debt issues or tax planning issues, feel free to contact me at (610) 594-2601 or by email at email@example.com.
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.
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.
BE SURE TO READ THE DISCLAIMER PAGE: Tax laws, IRS rules and regulations change frequently. Although we hope you’ll find this information helpful, this blog is for educational purposes only and should not be considered as the rendering of tax, legal or investment advice. The publisher 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 and your individual situation, please call us at (610) 594-2601.
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