Tax filing day will probably feel like it’s coming up more quickly this year
When the Wall Street Journal reported on Jan. 3 that the coming tax season is destined to cause headaches for filers, many taxpayers no doubt already were fearing the worst.
The last two filing seasons, for 2019 and 2020, were nightmarish for millions of taxpayers, especially those who had filed paper returns and were due a refund.
For many tax filers, the tax-filing seasons covering those two years were complicated by taxpayers who not only filed paper returns, but who also opted to receive their refunds by paper checks delivered by the U.S. Postal Service, which has been having its own efficiency and COVID-19-pandemic-related problems.
Clearly, direct deposit is an easier path to a quicker refund. Clearly, electronic filing is enabling the Internal Revenue Service to process returns more quickly.
All of that acknowledged, what also cannot be ignored is the fact that there still are approximately 6 million 2020 returns from 2021 that the IRS still has not processed, along with 2.3 million amended tax returns that can involve a processing time of more than 20 weeks.
But the IRS said in December that it was “on schedule” opening its mail, which evokes the question of how long mail is in the hands of the federal tax agency routinely before anyone has the opportunity to open it.
People who waited many months in 2020, not knowing whether the IRS had their 2019 returns in hand or had lost them, are in no way amused by predictions that the upcoming 2021 tax-filing season that will begin on Jan. 24 is not guaranteed to be more efficient.
And, it is reasonable for them to ask why, during this third tax-filing season of the COVID-19 pandemic, the IRS cannot be more optimistic about what lies ahead.
Perhaps it is because federal lawmakers, who are busy spewing rhetoric on numerous proverbial battle fronts, are not allocating a fair share of their time helping to ensure that this important function of government operates efficiently and effectively.
Taxpayers must meet the tax-filing deadline “or else,” but “or else” does not apply to the IRS because it is lawmakers who are largely responsible for its inefficiency because of their unwillingness to beef up IRS funding authorization to a degree that will significantly help processing efficiency prevail.
It is helpful when the IRS pays interest to taxpayers on top of their eligible refunds because of excessive delays in returns processing. However, for many taxpayers who have little or no savings and badly need their refunds to make ends meet during coming months, that interest amounts to small consolation for the financial suffering they have endured while awaiting their refunds’ arrival.
Add to all that the prospects for retroactive legislation and pandemic-era tax-law changes that will require extra attention, both from taxpayers and the IRS, and the stage is set for another disaster of whatever scope.
For example, the advanced payments of the child tax credit received in 2021 must be included on the tax returns that will be filed leading up to the tax-filing deadline that this year is April 18.
It is time for all taxpayers to begin planning how they will try to remedy their tax-filing headaches this year. From a tax-filing perspective, that date in April is much closer than it now appears to be.