WHO YA GONNA CALL?
ABO AND COMPANY? THE IRS? YOUR STATE TAX DEPARTMENT?
While we at Abo and Company, are burning the midnight oil to meet the May 17th tax deadlines (and getting out extensions as needed), perhaps this email alert will alleviate some of the many phone calls we’ve been receiving. Our contacts at Kiplinger, Forbes and a very seasoned colleague in California, James Counts, have all echoed our frustration in trying to communicate with the taxing authorities.
Have you filed your 2020 tax return and awaiting your refund? Well, stand in line as it could be delayed. The IRS is holding 16 million individual returns for manual processing. These include returns using 2019 income to figure the 2020 earned income tax credit, returns showing inconsistencies between IRS’s records on stimulus checks paid and the recovery rebate credit reported on the 1040, plus returns with other errors or potential fraud issues. 11 million business and other returns are also delayed.
Believe it or not, IRS is still processing 2019 individual returns. Have you, like many we’ve so told, tried calling IRS’s toll-free line about your refund or for other tax queries? Well, good luck in reaching a live person as the agency’s phone service has been dismal. IRS employees have answered only 2% of calls to the 1040 number. This equates to only one out of 50 calls have gotten through to a live operator with an average wait time on hold for these lucky callers was 20 minutes and even longer.
If you are calling about a delayed refund, expect even more frustration. Even if you can reach a live person, it’s unlikely the operator can help you much. IRS systems don’t explain why a return is needed for further manual review.
We did learn that the IRS is just now opening mail within normal timeframes and have made significant progress in processing prior year returns. As of April 23, 2021, they had 1.3 million individual tax returns received before 2021 in the processing pipeline yet also had another 16.9 million unprocessed individual returns in that same pipeline. The advice you’ll get, even after waiting so patiently? You are just encouraged to continue to check “Where’s My Refund?” for your personalized refund status but they also suggest you can review “Tax Season Refund Frequently Asked Questions.”
How long you may have to wait: They are just processing returns they received over the summer and fall in 2020 due to the extended July 15, 2020 tax filing due date. As we alluded to, they are still processing 2019 tax returns mailed with a payment even though payment associated with these returns may have been processed by the IRS. They also have been rerouting tax returns and taxpayer correspondence from locations behind to locations where more staff is available.
What you should do:
If you filed electronically and received an acknowledgement, there really is little you can do other than promptly responding to any requests for information. If you filed on paper, we and the IRS suggest you check “Where’s my refund?”
. The IRS request to us has been to please not file a second tax return or contact the IRS about the status of your return.
How about the state? Well, calling the state (at least has been our experience with New Jersey. Pennsylvania, New York, Delaware and California) is probably the least effective and least efficient way to handle a state tax dispute or discover where your refund is. Alas, the state tax departments are usually understaffed and overwhelmed, particularly during this 2021 filing season because they are still be dealing with the coronavirus pandemic.
Still want to call? Appreciate that call centers are not manned by tax experts. We’ve found these employees usually have training in customer service, have little actual tax knowledge, and they will probably want documentation you can’t give over the phone. We just don’t want you to expect to resolve the issue with a phone call unless your tax issue is very simple or you're able to speak with the actual auditor or adjuster who's been assigned to your case.
If you do want to try calling, ask the right questions if you get through to someone who might offer you some guidance. Ask for the name of a specific person to write to or call about your issue. Discover whether there's a specific procedure for appealing a tax assessment, what type of documentation you must provide, and to what address you should send a protest letter.
How about writing a letter? A letter can present a persuasive argument for your case, but make sure you have evidence to support all your claims. Include the Social Security number or other tax ID number you used on this return (or at least the last four digits). You'll also need the notice number if it's included on the notice you received. It's possible that no one will be able to help you if you can't provide this information. Some pointers we like to stress:
• Attach copies of your relevant documentation, noting the attachments in the letter. Most important, don't admit fault.
• Don't send partial payment or make a promise to pay.
• mail the letter by certified mail. Emailed letters are rarely answered.
What does the IRS website say when can you check your refund status?
• 4 weeks or more after you file electronically.
• At least 12 weeks after you mail your return.
• 15 weeks or more for additional processing requirements or paper returns sent by certified mail.
And what does the New Jersey website tell us?
• The state processes returns filed using computer software faster than returns filed by paper. Electronic returns typically take at least 4 weeks to process.
• Processing of paper tax returns typically takes at least 12 weeks.
• They process most returns through their automated system but staff members do look at some returns manually to see whether the taxpayer filed income, deductions, and credits correctly.
• Sometimes, they will send a filer a letter asking for more information. In such cases, they cannot send a refund until the filer responds with the requested information.