Internal Revenue Service estimates indicate that roughly 90 percent of eligible Americans already have received their $1,400 coronavirus stimulus checks under President Joe Biden’s American Rescue Plan.
But it appears that the same cannot be said for the refunds from the federal tax returns, as millions are enduring weeks-long delays in getting their hands on the money.
Currently, the IRS still has thirty-five million tax returns to process—a massive backlog that is four times larger compared to the end of the 2019 filing season. More than twenty million of those tax returns were filed by individuals who are still likely waiting on the refunds, according to a report conducted by the Taxpayer Advocate Service, which is an independent organization within the tax agency.
The latest estimates suggest that the average wait time for a tax refund has been roughly six to eight weeks—far longer than the typical wait time of three weeks or less.
Do take note that the IRS is juggling several responsibilities concurrently—and they include the sending out of child tax credits, “plus-up” payments, and unemployment refunds, among others.
“This filing season was the quintessential definition of a perfect storm—a particularly bad or critical state of affairs, arising from several negative and unpredictable factors—resulting in tens of millions of taxpayers experiencing hardship and uncertainty in trying to reach a live assistor,” Erin Collins, of the Taxpayer Advocate Service, writes.
She added that much of the ongoing delays can be blamed on the fact that millions of tax returns required manual processing this year due to discrepancies in how much filers were claiming for their stimulus checks. When the amount individuals claim is different from IRS records, the agency must initiate manual reviews.
Moreover, broken printers are adding to the increasing backlog. According to the report, as of March, more than 40 percent of the printers and copiers used by the IRS need repairs.
Be aware that similar delays are being witnessed with the refunds from 2020 unemployment benefits.
Early last month, the tax agency disbursed nearly three million refunds and said it would issue the next batch in mid-June. That, however, hasn’t become reality.
“The IRS plans to issue the next set of refunds in mid-June,” the agency wrote. “The review of returns and processing corrections will continue during the summer as the IRS continues to review the simplest returns and then turns to more complex returns.”
The agency has noted that an estimated ten million Americans likely overpaid on their unemployment taxes in 2020. Other estimates have the figure as high as thirteen million because many individuals had already filed their tax returns before the law change.
Ethen Kim Lieser is a Minneapolis-based Science and Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow or contact him on LinkedIn.