TAX REFUNDS

Tax refund delay: how many IRS tax returns remain unprocessed?

The various pandemic-era programmes introduced by the federal government have increased the tax authority's workload and caused delays in the tax refund process.

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Tax refund delay: how many IRS tax returns remain unprocessed?

The IRS has been under extreme pressure since the start of the pandemic, tasked with implementing a range of federal relief programmes designed to support individuals, families and businesses affected by covid-19.

Millions of people who claimed unemployment benefits during 2020 are due a substantial tax refund from the IRS after the American Rescue Plan retroactively made the jobless support tax-free. But there are long delays for those waiting for their refund as the IRS struggles to work through a huge backlog.

A recent report, released by the National Taxpayer Advocate, revealed that the IRS ended the 2021 filing season with more than 35 million unprocessed tax returns. This includes roughly 16.8 million paper tax returns and around 15.8 million returns that have been suspended pending further review. An additional 2.7 million amended returns mean that the backlog is nearly three times larger than the same point in 2020.

Why are there delays with refund payments?

As with most businesses and organisations, the IRS has been forced to run at restricted capacity for much of the pandemic with limits on the number of people allowed to enter the office. This has placed added strain on the tax return process and has left the IRS with a substantial backlog.

They are also continuing to make stimulus check payments throughout the rest of 2021 to ensure that everyone received their full entitlement. The various new programmes has caused confusion for some recipients and the tax authority is having to dedicate more time to addressing people’s queries.

Aside from these pandemic-era issues, your refund may also be delayed if the IRS has found errors in your tax return. This could be simple errors while submitting your information; suspicion of fraud or identity theft; or needing further review for other reasons.

How to check the status of your IRS tax refund

The delays can be extremely frustrating if you are relying on that money to pay for essentials, but thankfully the IRS has introduced an online tool to let you keep track of the payment. By logging on to Where’s My Refund? on the IRS’ website, or by downloading the IRS2Go app, you can see when your refund will arrive.

To do so you simply need to submit your Social Security number or ITIN; your filing status; and the exact size of refund you are expecting to receive. The IRS warn that many people are having to wait longer than the usual 21 days to receive their refund and that those who filed a paper return, rather than utilising the e-filing system, will likely have a longer wait.