Here is Why you may Not have Received your Tax Refund from 2021
Have you been constantly checking the IRS where’s my refund tool for your 2020 tax return and finding nothing? This is because IRS 2020 returns and refund backlogs are a nagging issue within Uncle Sam’s corridors. The IRS reckons that it will take more months to process the remaining millions of returns and verify some refunds from tax year 2020.
This issue has been causing a headache a many of you. I understand the pain of waiting for months and months just to get your tax refund. In some cases, taxpayers have been sitting on the phone for hours with their tax professionals like myself, trying to get answers from the IRS. Still, all those efforts are not yielding good results – at least for most taxpayers still being owed refunds.
Some taxpayers have been waiting for their refunds for more than ten months. And the frustration grows, given that we are already deep in the 2021 tax season. Taxpayers like you need information or transcripts from previous returns to file current tax returns. But that, too, has been a proper headache because you can’t have a transcript of an unprocessed return. However, I will explain what the IRS says you should do for now if they haven’t processed your 2020 return to file 2021 returns. For now, let me explain why you are still waiting to hear about your 2020 taxes – whether you have a refund or owe more taxes.
Why have you not received your refund for taxes you filed in 2021?
The Backlog
IRS is dealing with millions of backlogs for 2020 tax returns. This is a problem on its own. You might be wondering why this problem started in the first place. Well, this is because of the pandemic. Even though we are now at a time when things seem more lively amidst the pandemic, there was a time when we all hid behind closed doors in fear of the pandemic. And yes, that was in 2020 through to some early parts of 2021. It was during this time that a lot of things went south. Not only the IRS had backlogs or unfinished work – pretty much every business suffered something similar. But the IRS deals with important public matters, hence the increased scrutiny on their backlog.
Understaffing
CBS News reported that ‘serious’ understaffing has been going on for some time at the IRS. The work is plenty, but there are a few employees to deliver on the job. You may wonder why they are not just hiring some people to finish up the work. Well, that cannot be that easy. According to the Washington Post, employees must be hired and trained on the job – something that the IRS is struggling to do. The struggle to hire more employees is also because of the lack of adequate funding for the taxman, which has been the case for decades. However, President Biden seems to be willing to increase the IRS budget, and the current backlogs are a sign that he might be onto something positive.
Refund verifications
Of course, some tax refunds needed further verification before being sent out. For example, those claiming child tax credit and others with deductions that looked too good to be true. More so, if you filed a return that was missing more information, the IRS should have contacted you for additional paperwork.
All these verifications threw some tax returns at the back of the line. And if your 2020 return has not yet been processed, it is because of the two problems mentioned above – understaffing and the increased number of backlogs for 2020 returns. While here, this should serve as a lesson for you not to submit a return that is not complete.
What must you do if the IRS has not yet processed your 2020 tax return?
The truth is the said backlog are still going to affect 2021 returns. This is because the IRS is using its staff for processing returns from two years all at once. We are not yet sure of the extent of the delays this will cause for this tax season’s returns, but there could be delays.
However, what must you do if your 2020 return is one of those that are not yet processed?
Well, not knowing the status of your return or your refund status is niggly, but for now, your worry is about the transcript required to file a 2021 return. This is the transcript from your previous (unprocessed) tax return. If you fall in this category, it means you may have a ‘pending’ 2020 tax return problem. If this is the case, here is what you can do when filing 2021 tax returns:
- Submit your return even without your previous transcript; the IRS knows about this
- Enter $0 for your 2020 adjusted gross income when electronically filing because your 2020 return is still pending.
- Do step 2 even if you received the CP80 “missing return” notice for 2020.
- If you used the nonfiler tool in 2021 to collect the advance child tax credit payments or your stimulus check, put in $1 for last year’s Adjusted Gross Income (AGI).
Secondly, do not file a paper return this tax season. We already mentioned that the delays from last year are already impeding on 2021 returns being currently filed. Therefore, filing online and choosing direct deposit your refund method will help speed things up for you. Let me help you file a complete, accurate return online. Contact me to avoid further delays for your refund—my details are on the contact page.
People have also asked the following
- Why is the IRS delaying refunds?
The IRS delays refunds that need further checking to avoid sending fraudulent refunds. However, there has been a backlog on processing 2020 returns. Naturally, this means unprocessed returns for 2020 mean some taxpayers cannot receive refunds yet.
- Is IRS backed up on refunds?
Yes, some taxpayers have been waiting for more than 10 months to receive their 2020 refunds.
- How far backlogged is the IRS?
Reports say the IRS is yet to process anything between 10 million and 20 million 2020 tax returns.
- Why is my refund still being processed?
Your refund may still be in the verification process, and this is taking longer due to backlogs. IRS verifies refunds that look suspicious – maybe because you claimed a child who is also claimed by someone else, or you claimed too many deductions that look too good to be true.
