Will some tax refunds be delayed until 2021?
Silver lining is you may accrue interest on that delayed payment
The IRS has warned some taxpayers that their refunds would be delayed, but could some people be forced to wait until next year to receive that money?
Former Taxpayer Advocate Nina Olson told NPR it could take the IRS a year and a half to catch up on its backlogged paperwork, which includes 2019 paper returns sent in by taxpayers.
The IRS stopped processing paper returns at the end of March as it began adjusting operations in order to keep employees safe and to comply with coronavirus-related social distancing and stay-at-home guidelines.
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Current National Taxpayer Advocate Erin Collins recently confirmed that many taxpayers face “extreme delays” in receiving those checks.
A spokesperson for the IRS did not return FOX Business’ request for comment.
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There is a silver lining, however, for individuals who are required to wait weeks – or even months – for their refund checks.
The IRS said it would pay interest on individual 2019 refunds for returns filed by July 15 – the delayed tax deadline. Interest will “generally be paid from April 15, 2020, until the date of the refund.”
The interest will be paid because the agency held onto money that was rightfully yours.
The agency’s interest rate in the second quarter, ending June 30, is 5 percent per year compounded daily. For the third quarter, which ends Sept. 30, it is 3 percent per year.
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IRS Commissioner Charles Rettig said during congressional testimony June 30 that chipping away at that backlog of paper returns is a priority for the agency.
“The paper returns are a high priority for the Internal Revenue Service in terms of processing, and I think we’re running through that about 1 million a week – reducing the backlog about a million a week,” Rettig told lawmakers.
Once the returns are processed, the IRS typically issues refunds electronically within 21 days. In the regular mail, they can take up to six weeks.
About 8,300 people are working on refund-related activities at the IRS, according to the commissioner.