Tax refund season has turned into a nightmare for the Internal Revenue Service (IRS), which now has whole storage units full of unopened refund requests as the pandemic drags on.
The IRS still uses a lot of antiquated equipment, including much work done on paper, to process the entire country’s annual returns. Add to that the closing of all the agency’s usual physical processing centers due to the risk of infection, and the IRS is facing insurmountable, crippling challenges.
The agency has not been processing refunds as of late, focusing only on the stimulus payments of $1,200 to individuals, $2,400 to couples and $500 for children 17 and under, as dictated by the bipartisan legislation passed in March for the CARES Act.
As a result, the agency has had to delay the normal April 15 tax filing deadline through to July 15. Because of that, millions of individuals and businesses will have to wait longer for the refunds they’re used to getting every year like clockwork. That isn’t even taking to account those who are disputing how much they owe or wanting to see if they qualify for certain tax credits.
The direct deposits for the stimulus program started last week, and it didn’t take long before the program began to run into hurdles.
Users, many of them taking to Twitter, complained that their payments had instead been mistakenly sent to tax prep companies like TurboTax and H&R Block. Spokespeople for those companies said that wasn’t because of their systems and that they were working to make things right, saying they shared the obvious frustrations.
The IRS, while affecting more Americans than maybe any other federal service, has not been treated kindly by Congress in the past decade, seeing routine budget cuts and a shrinking workforce since 2011.
The challenges have not yet peaked: next week, the IRS will have to begin sending out paper checks for those who don’t have direct deposit info on file.
And beyond that, more stimulus payments may be voted on very soon by Congress as the pandemic continues to roil all sectors of life.