the turbulent tax season of 2022
The new tax season has begun, and if you're among the unlucky millions still waiting for your 2020 federal return to be processed, your level of frustration is likely to rise.
Some taxpayers have already complained about conflicting instructions from the IRS. Three days after the season began, the agency stopped sending certain notices because they left taxpayers confused and angry, or both.
These are the most frequently asked questions I've been getting about the new tax season. This is what I know:
WHAT TO KNOW
Why hasn't the IRS processed my 2020 return yet?
Should I even bother calling the IRS if I have a question or problem?
When is the best time to call the IRS?
Do I need to file my 2021 return even though the IRS hasn't processed my 2020 return?
What should I do if I want to file my 2021 return electronically but the IRS has not processed my previous return?
When can I expect my refund?
Why hasn't the IRS processed my 2020 return yet?
The vast majority of taxpayers will file their returns and get their refunds with no problem. The IRS says it expects more than 160 million individual tax returns for the 2021 tax year. But by absolute numbers, millions of people are trapped in a cycle of confusion and delay. A Virginia couple has been waiting to receive their refund since they filed electronically last May. "We've been told on the squat why 21 days has turned into more than 270 days and counting," said Michael Hobbs. “Some helpful souls have suggested that we send the IRS a letter or call them on the phone. They sure are kidding! The IRS is grappling with a slew of issues contributing to a massive delay in this year's filing season: pandemic-related staffing shortages dating back to office closures in 2020. Budget cuts. And outdated IT systems.
Of course, knowing why doesn't help those waiting for their returns to be processed. Even tax professionals complain about their inability to help their clients, because they also have trouble communicating with the IRS. — As of January 8, the IRS had 2.3 million unprocessed 1040-X forms. If you filed an amended return, the agency says not to file a new tax return or to contact the IRS about the status of your amended return. Instead, go to irs.gov and check Where's My Amended Return? — As of Jan. 26, the IRS had 1.1 million unprocessed Form 941s, which employers use to report income taxes, Social Security taxes or Medicare taxes withheld from employees' paychecks. — At the end of December, the IRS had a backlog of about 5 million pieces of mail from taxpayers, according to an annual report to Congress by National Taxpayer Advocate Erin M. Collins.
Should I even bother calling the IRS if I have a question or problem?
If you need help, yes, call the IRS. But the effort is likely to result in a long wait or possibly a hang after an automated voice thanks you for your patience. “Our individual telephone assistants, IRS employees, are working hard, but continue to receive millions more calls than we can handle with our current staff and given the impacts of COVID on call centers,” said IRS Commissioner, Chuck Rettig, during a press conference. last month. While phone support was bad last year, it's likely to be even worse this tax season as people seek guidance on child tax credit advance payments, the third stimulus payment, unprocessed returns, refund claims and other unresolved 2020 return issues.
How bad are things? During fiscal year 2021, the IRS received a record 282 million calls, but only 32 million of those calls were answered, Collins noted. Collins said IRS workers are so busy answering phones that they can't adequately address the backlog of documents, and as a result, processing returns is delayed. Some tax professionals are so desperate to reach the IRS that they are paying companies to wait on the phone line for them. Businesses use automated technology to continuously dial IRS phone lines. “A company charges up to $1,000 a month for this service,” Collins said. "It's a bad image for the IRS and unfair to taxpayers when some can essentially pay to get to the front of the line and receive services that should be equally available to all." When is the best time to call the IRS? The IRS says phone service wait times are longest on Mondays and Tuesdays, Presidents Day (February 21 this year), weekends, and around the April filing deadline. “So if you need to contact the IRS, call Wednesday through Friday and be very patient,” Collins said. Many readers have said that they have gotten better results by contacting the IRS early in the morning, starting at 7am. m Eastern time.
Do I need to file my 2021 return even though the IRS hasn't processed my 2020 return?
If you have all the documents you need, yes, you should go ahead and submit them. And if you can, file it electronically. Most importantly, this is the year to triple check everything. You want to avoid anything that requires a manual review of your return.
What notices are being suspended by the IRS?
Because the IRS is so overwhelmed, the agency said it has decided to suspend some notices, but it's not entirely clear which ones. The agency has specified to suspend only the CP80 and CP080 . The notices involve situations where the IRS has credited payments to taxpayers, but the agency has no record of the filing of the tax return. The suspension did not come in time for many taxpayers who received the notice and are terrified of what to do. Although the notice told some people to mail another return, those who called and contacted the IRS received different instructions. Another reader wrote: “I submitted my return in March 2021 with a check for $1,604. Since the IRS cashed my check and I have a copy as proof, I know they also received my form. I tried to call the number on the form, but the final message I got was that they couldn't help with the problem." This is what the IRS had posted on its website as of Thursday: “Due to delays in processing 2019 and 2020 tax returns, the issuance of Notices CP80 and CP080 (Unfiled Tax Return) has been suspended. : account credit). If you received a notice for your 2019 return and filed it on time, file again. If you received a notice for your 2020 return, please DO NOT file again.”
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