Recent discussions with Internal Revenue Service (IRS) representatives have uncovered one reason for taxpayers experiencing significant delays in receiving their individual income tax refunds for the 2020 tax year.
As you may recall, the deadline to file federal individual income tax returns (Form 1040) for the 2020 tax year was delayed, from the typical April 15th due date, to May 17, 2021.
As a result, taxpayers who requested an extension of time to file their 2020 individual income tax return had until May 17, 2021 to make their required extension payment. The fact that the 2020 extension payments were made after April 15th appears to be creating chaos for the IRS’s computer system and return processing procedures.
During our discussions with several different IRS representatives, we were informed that refunds for a least some specific taxpayers who made a payment with their 2020 extension request are being delayed due to a “glitch” in the IRS computer programs. This “glitch” is causing overpayments to be suspended and requires IRS representatives to manually release the refunds on a case-by-case basis. Our efforts in assisting these specific taxpayers by having discussions with the IRS uncovered the “glitch” and the necessary correction that will now allow the taxpayer to receive their federal tax refund within 3-8 weeks (per the IRS representatives) rather than sit and wait in the dark for the IRS to discover the problem and solution on their own.
If you made a payment with your 2020 individual income tax extension (Form 4868) and have not received your refund, you may want to contact the IRS by calling 800-829-1040 (7 a.m. to 7p.m. local time) to determine if your refund has been suspended by this computer glitch.
If you have any questions relative to your individual income tax return or refund, do not hesitate to contact Mark Di Pietrantonio or another member of the Schneider Downs tax department.
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