This time last year, the IRS was processing federal returns with few problems — nearly 138 million by the third week in May. This year, with staff sent home because of the novel coronavirus, the agency has only processed 117 million returns, down 14 percent from last year, according to the latest statistics for the 2020 filing season.The average refund is $2,778, about the same as last year at this time.
This year’s tax deadline has been pushed back to July 15. That’s a good thing, because the agency has been preoccupied with getting out tens of millions of stimulus payments — up to $1,200 per qualified individual — through the Cares Act.
With just about a month and half to go, a challenging tax season will only get more stressful for taxpayers with problems that can’t be solved by going to irs.gov.
It probably won’t end your frustration, but the following list may explain why you aren’t getting the help you need right now. Here’s what the IRS can’t do because of the pandemic:
— Process paper returns. The IRS is not processing individual paper tax returns. The agency says if you’ve already filed a paper return, don’t file a second one for fear the first one got misplaced. Returns received through the mail will be processed once processing centers have reopened. The IRS hasn’t told the public when this might occur. And even when the centers open, the pace of work is likely to remain super slow. Like so many other employers, the IRS must comply with social distancing guidelines, which means the processing centers may not be fully functioning for months.
— Mail tax forms. The National Distribution Center, the IRS office that would normally send out forms or publications, is closed. You can, however, download most forms at irs.gov/forms.
— Respond to mail or email correspondence. The IRS says don’t bother writing to inquire about your return, refund or stimulus payment. The agency doesn’t have the staff to respond to taxpayer questions.
— Answer your call. The IRS has for years struggled to handle the high volume of calls from taxpayers. If you have a question about your stimulus payment, the IRS is providing live assistance. Callers must first navigate past the recorded messages. Even then, the help is very limited, often referring people back to irs.gov for answers.
Here’s what the IRS can do, and is doing, as the July 15 tax deadline approaches:
— Process electronic tax returns. Even during the best of times, it’s better to file your return electronically, especially if you are expecting a refund. This year, more than 90 percent of taxpayers have filed electronically. If you are able, you can prepare your own taxes by using the IRS’s Free File Fillable Forms.
— Collect taxes due. Don’t believe for a second that because the agency is not fully operational you get to put off paying your taxes. Unless the deadline is pushed out further, if you owe the IRS, you need to make an electronic payment by July 15 or have your paper return postmarked by that date. Eventually the IRS will process your paper return, and you don’t want to be hit with interest and penalties for failing to file on time and pay what you owe.
— Provide tax transcripts. The IRS is not processing transcript requests by mail. But if you need information from a recently filed return, you can set up an IRS online account, which will give you access to the tax tool “Get Transcript.” To e-file, you may need your prior year adjusted gross income, or AGI, and the Get Transcript tool will provide this information. Once you sign into your account, click the link for “Tax Records” to view key information from your most recent tax return and download tax records.
— Send refunds. If you haven’t filed and you’re due a refund, file as soon as you can and request direct deposit, which will speed up your payment.
— Create payment plans. If you owe but can’t pay, you can apply online for payment plan. You can apply for a short-term plan that gives you 120 days to pay your tax balance in full or for a long-term installment agreement that allows you to make monthly payments on your balance.
— Answer the question, “Where’s My Refund?” The online service to track your refund remains available, just as it was before covid-19.
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