State of the IRS – Challenges and Frustrations Abound
It’s no secret that the IRS is struggling – and despite billions in new funding over the next decade, the challenges aren’t likely to go away any time soon. The pandemic’s seemingly never-ending impact, repeated budget cuts, understaffing, a constantly changing and overly complex tax code, and woefully outdated technology all contribute to the issues. And while new funding should help the agency hire thousands of new employees, they’re facing the same hiring challenges as virtually every other hiring organization.
Knowing the cause of the problems doesn’t make it any less frustrating when you’re looking for your tax refund, waiting for your ERTC credit funding, or contending with an erroneous IRS notice. But, there are things you can do to make dealing with the IRS less of a hassle.
E-file your tax return
One of the simplest things you can do is simply e-file your return. There are plenty of reasons to do so – it’s convenient and flexible, saves you time and money, reduces the opportunity for error, and increases accountability – but the biggest reason? You’ll get your refund faster.
According to the IRS website, if you e-filed, you should receive your tax refund within 21 days (assuming no errors were found in the return). But if you file a paper return? It could take six months or even longer. So we’ll say it again. E-file.
Go all in on direct deposit
The IRS isn’t the only agency struggling: the U.S. Postal Service has its share of woes, and it’s increasingly likely you may not receive something sent to you via mail. It’s a nationwide problem – and this one isn’t going anywhere any time soon, either. That means if the IRS mailed you a printed check, it could be lost and you may never receive it.
All you need to do is include the bank account information where you’d like your refund to be direct deposited. It greatly enhances the odds that you’ll get your refund.
Put down that phone
If you receive a notice from the IRS (like a statement that a tax credit is miscalculated or a deduction has been denied), you have 60 days to respond. Luckily, there’s a phone number on the notice you can call to dispute the agency’s claim. Unluckily, you may or may not ever be able to get through to an actual person, and if you do, you’re likely to get bounced around from person to person like you’re the ball in some sort of deranged tennis match.
Instead, we recommend responding in writing to the address on the notice and sending your response via USPS-certified mail (yes, the postal service is struggling too as noted above, but this is better than the phone option).
Sending by certified mail and getting the return receipt means you can prove you responded before the 60-day deadline. And if you don’t get a return receipt? Unfortunately, you’ll have to re-send your response. The earlier in the response window you act, the more time you’ll have to correct any issues with mail delivery.
Once you have the return receipt, it’s a waiting game. Thomson Reuters indicates the IRS business return group is 3-4 months behind, and the personal return group is even deeper underwater. So it will be a while.
Talk to a tax pro
A professional tax preparer can go a long way towards reducing the likelihood of receiving an erroneous notice from the IRS – and is there to work with the IRS on your behalf if an issue does arise. Get in touch with a member of our tax team for a free consultation – we’re here to help.