Many US taxpayers are experiencing significant delays to tax refunds during this year’s filing season. According to an article on CNBC, “the IRS flagged 5.2 million tax refunds for fraud last year, a nearly 50% increase over 2019, according to the Taxpayer Advocate Service, an independent organization within the IRS”.
However, according to the article, most flagged returns aren’t fraudulent. In 2019, 63% of the refunds vetted for identity fraud turned out to be legitimate, according to the Taxpayer Advocate Service.
Whilst taxpayers will eventually receive their refunds, with interest, some are having to wait several months and are experiencing undue hardship as a result. Phone lines are also under intense pressure with many calls going unanswered.
The tax agency reported that it had a backlog of over 35 million individual and business income tax returns still awaiting processing as of the end of June.
Some of the delays have been caused as a result of the Covid pandemic as the IRS had to temporarily suspend some of its in-person operations.
Delays continue as of September 2021 with CNET reporting that the IRS still has “millions of unprocessed tax returns to get through”.
Taxpayers may also be incurring more financial loss this year as a result as the agency uses information based on a 2019 return if one for 2020 hasn’t been processed. This may result in reduced payments, or sometimes none, depending on a taxpayer’s situation.
Identity theft has been on the increase since 2005 so this is obviously a necessary check and, according to the IRS, its fraud measures protected $3.5 billion in revenue in 2019.
Whilst there is an online system in place to allow people to verify their identities online using the IRS website, many are experiencing problems with its authentication process with less than half getting through it. This means they have to make contact with an IRS agent to resolve it, but the IRS doesn’t have enough staff to manage the huge volumes it’s having to deal with.
If you entrust your tax affairs to Sestini & Co, our staff can file and liaise with the IRS on your behalf, helping to make the process much smoother.
How we can help
If you’re struggling with your tax affairs or other financial issues during this time, why not talk to us. Here at Sestini & Co we dedicate considerable time and expertise to keeping up with changing case law and ensuring we know the tax rules and can help you navigate through any problems.
Our experts can help you with UK or US tax queries, holding CTA qualifications, acceptance as an enrolled agent, and members of the Association of Independent Expatriate Tax Practitioners (AIETP).
If you need help with any tax-related issues and would like to speak to us, give us a call on 01761 241 861 or email us today or arrange an appointment to see us at our offices in Paulton, near Bristol and Bath, for a consultation.