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Advocate: More Info Needed More Refund Delays

The Internal Revenue Service should have done a better job of informing taxpayers about refund delays during the past tax season, according to the annual report of the National Taxpayer Advisor. The report to Congress this week by Advocate Erin M. Collins said the IRS should create a regularly updated “COVID-19. Dashboard” and by issuing weekly news releases.

Millions of returns were not processed because IRS personnel were not on-premise during the coronavirus pandemic. But information about the problems was not given in a timely fashion to the public.  For example, on December 31, the IRS website had an update dated December 1 that stated there were 7.1 million unprocessed  individual and 2.3 million unprocessed business returns as of November 24 with some of those dated back to April 15.

The Advocate’s reports says the IRS should update the backlog information weekly, which should result in fewer calls from taxpayers.

Refunds continued to be delayed by IRS fraud detection filters. The report said for about 25 percent of the reports flagged for income verification, refunds took longer than 56 days. About 18 percent of returns marked for identity verification took longer than 120 days.

There was also a problem with millions of individuals not receiving some or all of the Economic Incentive payments to which they were entitled. Although the IRS agreed to fix some EIP problems that could be resolved by automation, the agency was unable to resolve many cases last year, meaning those individuals will have to wait until they file 2020 tax returns to receive payments.

Additionally, taxpayers received more than 20 million notices that had dates that had passed and in many cases, response or payment deadlines that had passed. The IRS used inserts with about 1.8 million notices to explain taxpayers would have additional time to respond but failed to include inserts with many other notices.

Bob Scott
Bob Scott has provided information to the tax and accounting community since 1991, first as technology editor of Accounting Today, and from 1997 through 2009 as editor of its sister publication, Accounting Technology. He is known throughout the industry for his depth of knowledge and for his high journalistic standards.  Scott has made frequent appearances as a speaker, moderator and panelist and events serving tax and accounting professionals. He  has a strong background in computer journalism as an editor with two former trade publications, Computer+Software News and MIS Week and spent several years with weekly and daily newspapers in Morris County New Jersey prior to that.  A graduate of Indiana University with a degree in journalism, Bob is a native of Madison, Ind
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