The Internal Revenue Service (IRS) building in Washington, DC, on April 15, 2019. Washington, District of Columbia. In the United States, residents have until April 15 to submit their income tax returns. (Image courtesy of Zach Gibson/Getty Images))
The IRS’s inventory of tax returns, payments, refunds, and correspondence continues to advance. However, some industries continue to experience delays. Here is the current situation.
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The IRS reports that it has processed all paper and electronic individual tax returns received prior to April 2023 and that it is opening mail in accordance with standard procedures. This indicates that all returns for the tax year 2021 or earlier have been processed if they were error-free and did not require further review.
As of July 8, 2023, the agency had not yet processed 2.42 million individual tax returns. These include returns for the tax years 2022, and 2021 returns that require review or correction, and returns for prior years that were lodged late. 1,6 million of these returns require error correction or special handling, while 820,000 are paper returns awaiting processing.
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This work typically does not require taxpayer correspondence, but it does require special handling by an IRS employee; therefore, it takes the IRS longer than 21 days to issue any refunds related to this work.
Present Year
Regarding individual tax returns received in the current year, the IRS will process refund-eligible returns first. Tax returns that indicate a tax liability are processed last, but the IRS wants to be paid. If a payment is mailed with the tax return, it is separated and deposited upon receipt.
Due to errors, tax returns that require manual review will be processed in the order they were received.
Some returns require a second review. If the IRS requires additional information or verification that you submitted a tax return, they will send a letter. This could take longer than 120 days, depending on the speed with which you respond and the agency processes your return.
Refunds
Most IRS refunds are issued in less than 21 days. However, if you filed your return on paper and are expecting a refund, it could take up to four weeks to process your return.
Where’s My Refund? provides additional information. Information is available 24 hours after filing an electronic return for tax year 2022, three or four days after filing an electronic return for tax years 2020 or 2021, and four weeks after filing a paper return.
Additionally, you can contact the automated refund hotline at 800-829-1954. The hotline cannot provide refund status information for tax years other than 2022.
If the IRS requires additional information to process your return, they will send you a letter. Due to the fact that the IRS is still processing your return or correcting an error, the agency cannot provide you with a specific date for your refund.
If you are eligible for a refund, filed on paper more than six months ago, and Where’s My Refund? does not indicate that your return has been received, you should resubmit your tax return, if feasible electronically.
Tax returns must be signed (with fresh ink if submitted on paper) and must include all documents submitted with the original return. However, if this particular set of circumstances does not apply to you, you should not submit a second tax return. This will bewilder the IRS.
Revised Returns
The IRS had 1.29 million unprocessed amended individual tax returns as of July 8, 2023. This is an increase from earlier in the year and represents returns received throughout the tax season. The agency processes these returns in the order they were received, and the current processing time can exceed 20 weeks.
Don’t submit the same tax return multiple times, as the pile will only grow larger. Check Where’s My Amended Return? to determine the status of your refund on an amended tax return.
Employment Tax Returns
The IRS had 266,000 unprocessed Forms 941, Employer’s Quarterly Federal Tax Return, as of July 13, 2023. These returns are handled in the order they were received.
On the 12th of July, 2023, the total number of unprocessed amended payroll returns was approximately 442,000, the majority of which pertained to Employer Retention Credits (ERCs).
Certain amended forms cannot be processed until the corresponding 941s have been processed. Even though not all of these returns involve a Covid-19 credit, the entire inventory is processed at only two locations (Cincinnati and Ogden) by personnel trained to review these returns.
Applications for Tax Relief
Each year, the IRS receives over 95,000 petitions for tax-exempt status. Applications are being processed, but there may be lengthy delays in review.
Forms 1023-EZ submitted after July 7, 2023, as well as Forms 1023 submitted after November 22, 2022, have not yet been assigned to a specialist.
Regarding Form 1024, applications submitted after January 19, 2023, have not yet been allocated to a specialist, while Forms 1024-A applications submitted after December 15, 2022, have not been assigned.
ITINs
Forms W-7, Application for IRS Individual Taxpayer Identification Number, received in April 2023 are currently being processed by the IRS. These are processed in the order in which they were received, and the current processing timeframe is 12 weeks.
You will be notified once your ITIN has been assigned or if the IRS requires additional information or documentation. Original identification documents submitted with Form W-7 will be returned as soon as possible to the mailing address on file. The corresponding tax return is then submitted for processing.
Forms 8821 and 2848
The IRS states that it processes third-party authorizations, such as Forms 2848 and Forms 8821, in the order in which they are received. They cannot provide a completion date at this time.
Assuming you have a Centralized Authorization Number (CAF) Number, the IRS recommends submitting these forms through the Tax Pro Account utility.
Note that Form 2848 and Form 8821 authorizations can be published online using the Submit Forms 2848 and 8821 Online tool, but manual processing is still required.
In practice, tax professionals can also transmit Form 2848 to the agent they are speaking with over the phone via fax (these forms will not be processed for future use).
Notices
The IRS has resumed issuing the majority of notices, including collection notices.
If the IRS can correct an error on your tax return without contacting you, they will. If the IRS requires additional information or verification that you sent the tax return, they will send you a letter.
Depending on how quickly and accurately you respond and how rapidly the IRS is able to process your return, the resolution of these issues could take more than 120 days.
Telecommunications Service
Telephone support is available for taxpayers and tax professionals, according to the IRS. This does not imply that all calls are being answered; those who call during peak hours should still try again later. I am able to confirm that the call-back service is operational on some lines.
(TAC) Taxpayer Assistance Centers
Open our Taxpayer Assistance Centers. You can locate one nearby online.
The IRS announced earlier this month that it is reopening previously closed TACs and adding new TACs. Here you can learn more about those.
TAS is the Taxpayer Advocate Service.
All TAS local phone lines are active. If you have a tax issue that you have been unable to resolve on your own, or if your IRS issue is causing you financial hardship, the Advocate may be able to assist you. You can call 877-777-4778 or visit Taxpayer Advocate Service to obtain the phone number for your local TAS office.
TAS cannot take requests for refund delay assistance for pending tax returns, including requests made through the Systematic Advocacy Management System (SAMS).
