The IRS had an estimated backlog of 3.6 million paper tax returns as of July 4.
Photo: andrew kelly/Reuters
Sandra Martensen is worried. She and her husband mailed their paper tax return to the Internal Revenue Service on April 7, claiming a refund of about $1,600. Since then she has heard nothing from the IRS. She has tried repeatedly to get information from the IRS’s Where’s My Refund online tool and phone number, but both say there’s no record of the tax return.
She wonders if she should refile her return or file an amended return. “I don’t want them to come to me in November and say, ‘We haven’t heard from you’,” says Ms. Martensen, a retiree living in Yakima, Wash.
Many others are asking these questions and more in this extraordinary year for tax filing. Due to the coronavirus pandemic, the IRS delayed the tax-filing date from April 15 to July 15.
Agency resources were needed to send stimulus payments to about 160 million Americans beginning in April, and office closures due to the pandemic slowed or halted return processing. Millions of paper returns had to be stored until staffers could deal with them.
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Here are IRS responses to questions tax filers are asking.
What do we know about the IRS’s backlog?
Many of them are paper returns. On June 30, IRS Commissioner Chuck Rettig told the Senate Finance Committee that the IRS had an estimated backlog of 12.3 million paper tax returns or correspondence as of mid-June. As of July 4, that backlog had shrunk to 7.8 million, including about 3.6 million paper tax returns. An IRS spokesman said staffers are working to clear the backlog as soon as possible, but that could take weeks—or even longer if pandemic surges affect operations again.
As of July 3, 2020, the IRS had received 142 million returns from individuals and processed about 131 million of them. The agency expects to receive a total of about 155 million returns for 2019 by Oct. 15, 2020.
I sent in a paper tax return several weeks or months ago, but I haven’t gotten my refund. Should I refile?
The IRS is telling taxpayers not to refile returns. Instead it wants them to wait while the agency whittles its backlog, but do check the “Where’s My Refund?” online tool or phone number. Refund status will be listed there at some point, whether the taxpayer e-filed the return or submitted it on paper.
I e-filed my taxes in April but I haven’t gotten my refund. What do I do?
First, make sure you have a notice saying your return was accepted. If you didn’t get one, chances are the transmission didn’t go through, and you may need to refile. If you successfully e-filed but for some reason didn’t get an acknowledgment, the refiling will be rejected.
Sometimes e-filed returns are accepted but refunds are held up because of a problem, such as incomplete bank deposit information, tax ID theft, or another processing issue. The process for dealing with these issues has been delayed by the pandemic. The agency recommends that the filer keep waiting and continue to check “Where’s My Refund?”
I read that the IRS is paying interest on refunds. Is that true?
Yes. Due to a quirk in the law, the IRS will be paying interest on refunds issued after April 15, 2020. The rates are far higher than a bank would pay: an annual rate of 5% compounded daily for the second quarter and 3% compounded daily starting July 1. The interest payment will likely be sent separately from the refund, and it’s taxable income for 2020.
I mailed a paper return with a check for taxes due but the IRS hasn’t cashed it. Should I cancel the check and send another one, or use an online payment method such as IRS Direct Pay? Will I owe penalties for late payment?
The IRS is asking filers not to resubmit payments, but to wait longer and see if the problem resolves.
If a correct payment was submitted on time and the IRS knows this, you shouldn’t owe penalties. If there is a problem, the agency is expected to provide generous penalty relief this year due to pandemic disruptions.
If the IRS hasn’t cashed my payment check, what’s the proof that I sent it?
Tax professionals urge that people who mail paper returns, forms or letters to the IRS always get proof of mailing, such as a certified mail receipt, and be careful not to misplace it. The IRS takes this evidence seriously if issues arise. It also routinely checks postmarks.
What if most people have their problems resolved in a few weeks or months, but I don’t?
Be alert for IRS announcements detailing its progress and revised recommendations. If all else fails, seek help from the Taxpayer Advocate Service, an independent unit within the IRS, which often can resolve difficult problems.
Write to Laura Saunders at laura.saunders@wsj.com
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