Filing Electronically Can Prevent Tax Season Headaches

March 19, 2022 Topic: Tax Season Blog Brand: Politics Tags: IRSTax SeasonFederal TaxesTax ReturnPersonal Finance

Filing Electronically Can Prevent Tax Season Headaches

"E-filing" can make it easier to resolve issues with the IRS. 

 

Despite the well-known budgeting and staffing issues at the Internal Revenue Service, the beleaguered agency is moving along relatively smoothly in processing this year’s tax returns.

The IRS has stated that it has so far received about fifty-five million individual income tax returns and has processed over fifty-three million of them. As for the all-important tax refunds, the agency said that it has issued nearly thirty-eight million payments for a total of nearly $130 billion—coming out to an average refund of $3,401.

 

While this tax season is far from being the all-out disaster that some experts had predicted, it hasn’t been smooth sailing on all levels. There are still plenty of reports of taxpayers waiting on tax refunds from this year and last year, and the odds of actually getting a representative on an IRS phone line to sort out any issues is slim.

Twenty Million Returns Delayed

“The IRS itself has projected that nearly 21 million electronically filed returns could be delayed this tax season because of discrepancies related to changes Congress made in the refundable child and dependent care credits,” notes personal finance writer Janet Novack at Forbes.

“That’s on top of millions of other returns that will get kicked out of the IRS’ normal computer processing stream for some other reason—say, a suspected case of identity theft or fraud, a Social Security number that doesn’t match its records or a mismatch related to the 2021 $1,400 per person Economic Impact Payments i.e. stimulus checks.”

Citing information from Nina E. Olson, a tax lawyer and the founder of the Center for Taxpayer Rights, Novack goes on to mention the shortcomings of the IRS’ highly advertised “Where’s My Refund?” app.

“That service can tell you that your return was received, or your refund was approved or that a refund has been sent,” she writes.

“But it won’t tell you anything useful between the received and approved phase,” Olson warns. It won’t, for example, tell you that your return was kicked out of normal processing for some discrepancy,” she continues, adding that a survey last year discovered that only 24 percent of the app’s users found the app to be helpful.

Always E-File

Olson contended that filing electronically is still the best option even if the return needs a letter of explanation for a certain issue. “Who knows when a paper return is going to be processed?’’ she told Forbes. When it is finally processed, the IRS may find a math error adjustment or a similar issue and require the return to be submitted again.

Olson concludes by saying that by e-filing, a taxpayer can receive a part of their refund that the IRS agrees with faster, and they will also get the opportunity to dispute any issues with the agency faster.

Ethen Kim Lieser is a Washington state-based Science and Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow or contact him on LinkedIn.

Image: Reuters.