The Internal Revenue Service opened tax season Monday as it faces a backlog of millions of unprocessed tax returns, and warned taxpayers and tax preparers to be patient, file electronically and accurately, and request direct deposit of tax refunds. It also had some extra advice for those whose 2020 returns have not yet been processed.
The IRS is expecting more than 160 million tax returns to be filed this year. It will be dealing with pandemic tax relief programs like the third round of Economic Impact Payments and the advance payments of the expanded Child Tax Credit that went out to taxpayers last year. The service has been sending out letters to taxpayers detailing the amounts they received last year, and they will need those when they fill out their tax returns this year. The IRS has been trying to staff up to deal with the overwhelming volume of phone calls it expects to receive and is urging taxpayers to use its website for information instead, as it has only been able to answer a fraction of incoming calls.
“This filing season is a unique one,” IRS Commissioner Chuck Rettig said Monday during a conference call with reporters. “There have been many issues tied to the pandemic with processing centers having closed down, and a larger share of our workforce unable to work for reasons of health and safety. As you know, we received quite an array of new responsibilities during the course of the past year or so. I will say, speaking from the commissioner’s perspective, it has been a privilege to be on this journey with so many dedicated individuals during the pandemic, and to be involved with the delivery of stimulus payments and advance Child Tax Credit payments to millions and millions of Americans in need. Beyond the obvious economic benefits, there are emotional benefits as well. The IRS was front and center in delivering a lot of that.”
However, he warned that this tax season could be a big challenge for taxpayers and practitioners. “The Treasury has previously announced that this could be a very frustrating filing season for both taxpayers and tax professionals,” said Rettig. “For too long, the IRS has suffered too few resources to get the American people the services that they deserve. We’re the greatest country on the planet. Our people deserve the greatest services available anywhere. While continuing to face consequential resource challenges, I want you to know that our employees are committed to doing everything possible in an all-hands-on-deck approach to get people the help they need this filing season as quickly as possible.”
The IRS is urging taxpayers to file electronically and accurately so their tax returns don’t get caught up in the automated filters that cross-check information on the 1040 against W-2 and 1099 forms, and to use direct deposit if possible. Paper returns will take a longer time to process.
Most taxpayers will have until April 18 to file this year because of the Emancipation Day holiday in Washington, D.C falling on April 15. Taxpayers in two states, Massachusetts and Maine, will get an extra day, with an April 19 deadline thanks to Patriots Day. Victims of natural disasters will also have later filing deadlines in some locations.
Taxpayers who claim the refundable Earned Income Tax Credit or the Additional Child Tax Credit will have to wait a little longer to get their refunds because of the fraud checks that the IRS is required to do.
“By law the IRS cannot issue a refund involving the Earned Income Tax Credit or the additional Child Tax Credit tax credit before mid-February, though eligible people may file their returns beginning today,” said Ken Corbin, chief taxpayer experience officer at the IRS and commissioner of the IRS’s Wage and Investment Division. “Due to the holidays, weekends and bank-processing times, people in this group should expect to see their refunds by early March. We know there’s a lot of interest from this group, and we appreciate their patience as we are following the guidelines laid out in the PATH Act law.”
He had a special piece of advice for taxpayers who are still waiting for their 2020 tax returns to be processed and how they should fill in their 2021 tax returns. “We also know that we have millions of people who are waiting on their 2020 tax returns to be processed,” said Corbin. “We know this is a frustrating situation, and we are doing everything possible to continue working on this while also making sure the current tax season goes smoothly. This is another reason why people shouldn’t file on paper this year if at all possible."
"For those who haven’t had their 2020 tax returns processed, they can still file their 2021 tax return, and we encourage them to do so," he continued. "There will be situations where people will need to get their 2021 refunds before their 2020 tax returns are processed. They shouldn’t worry about that. We are continuing to work on the 2020 returns. However, we have a special instruction for people in this group when they get ready to electronically file their 2021 return. If your 2020 return hasn’t been processed, when prompted by software for their adjusted gross income, taxpayers should use zero as the amount of their adjusted gross income for 2020. This will help us process their tax return.”
That means that for those waiting for their 2020 tax return to be processed, they and their tax preparers should be sure to enter $0 (zero dollars) for last year’s AGI on the 2021 tax return. For more information, visit
On Monday, the IRS posted
