Manuel DaRosa, CPA
Accounting and Tax firm with offices in Taunton, Falmouth and Mansfield, MA
NEWSLETTERS

Where’s My Refund?

IRS seeks upgrade to dreaded online tool, but don’t hold your breath

In the midst of a particularly horrific tax season, with the beleaguered Internal Revenue Service (IRS) swamped by backlogged returns and citizens waiting anxiously for missing refunds to appear, many taxpayers seeking clarity have been referred to the dreaded online “Where’s My Refund” tracker. In other words, the place where inquiries go to die.

The “Where’s My Refund” tool, which lives on the IRS website, has been of scant help to many visitors, informing taxpayers with late refunds only that their returns are “pending.” It does not offer any estimate of when refunds can be expected, nor does it advise if additional supporting documents are needed. The lack of such basic services was flagged by the Taxpayer Advocate Service (TAS)—the arm of the IRS that ensures fair treatment of citizen taxpayers—which recommended that the IRS supply these features as quickly as possible.

And according to a TAS report, the IRS seems to have taken the first steps. It has submitted several “Unified Work Requests” to its engineers, requesting programming upgrades to the tool that would include more specific reasons for why a refund has been delayed, or a notice if it’s still reviewing whether supporting documents are needed. It also says it’s exploring a system by which taxpayers can digitally transmit documents to the IRS, such as uploading through the IRS.gov website. That could include a permanent extension of the interim rules, allowing people to submit identity verification files over eFax during the COVID-19 pandemic.

But it’s not a done deal by any means: The IRS cautions that such programming upgrades are “subject to funding limitations and competing priorities,” meaning all this could very well amount to nothing if cash is thin or other issues are deemed more important. It’s also worth noting that another request—to supply relevant contact telephone numbers through the “Where’s My Refund” tool—has already been denied “due to funding limitations.” So if you’re still waiting for your 2020 refund, maybe don’t hold your breath.

Further along in the report, the IRS also notes it would not be able to expedite legitimate refunds by modernizing its “obsolete” systems—also “due to funding limitations”—nor would it be sharing data about how long it detains legitimate refunds that are tagged by fraud filters.

Tax Alerts
Tax Briefing(s)

WASHINGTON — The Internal Revenue Service today announced it is providing transition relief to certain employers claiming the Work Opportunity Tax Credit (WOTC). The WOTC is a federal income tax credit available to employers that hire certified members of certain groups specified in the Internal Revenue Code who face significant barriers to employment, including Designated Community Residents or Qualified Summer Youth Employees.


The gap between taxes owed and taxes collected by the Internal Revenue Service could be approaching $1 trillion, IRS Commissioner Charles Rettig told members of the House Committee on Oversight and Reform’s Government Operations Subcommittee as he advocated for more funding for the agency.


Internal Revenue Service Commissioner Charles Rettig remained positive that the agency will be able to return to a normal backlog of unprocessed returns and other mail correspondence by the end of the year and noted progress on hiring more people to help clear the backlog.


The IRS addressed the following common myths about tax refunds:


The IRS has informed taxpayers that the agency issues most refunds in less than 21 days for taxpayers who filed electronically and chose direct deposit. However, some refunds may take longer. The IRS listed several factors that can affect the timing of a refund after the agency receives a return.


The IRS reminded educators that they will be able to deduct up to $300 of out-of-pocket classroom expenses when they file their federal income tax return for tax year 2022. This is the first time the annual limit has increased since 2002.


Taxpayers who may need to take additional actions related to Qualified Opportunity Funds (QOFs) should begin receiving letters from the IRS in April. Taxpayers who attached Form 8996, Qualified Opportunity Fund, to their return may receive Letter 6501, Qualified Opportunity Fund (QOF) Investment Standard. This letter lets them know that information needed to support the annual certification of investment standard is missing, invalid or the calculation isn’t supported by the amounts reported. If they intend to maintain their certification as a QOF, they may need to take additional action to meet the annual self-certification of the investment standard requirement.


The IRS informed taxpayers that it will send Notices CP2100 and CP2100A notices to financial institutions, businesses, or payers who filed certain types of information returns that do not match IRS records, beginning mid-April 2022.


The IRS has issued a guidance stating that government employees who receive returns or return information pursuant to disclosures under Code Sect. 6103(c), are subject to the disclosure restrictions, like all designees who receive returns or return information pursuant to taxpayer consent. Further, government employees who receive returns or return information pursuant to disclosures under Code Sec. 6103(k)(6) or (e), other than Code Sec. 6103(e)(1)(D)(iii) (relating to certain shareholders), are not subject to the disclosure restrictions with regard to the returns or return information received.


The IRS has provided a waiver for any individual who failed to meet the foreign earned income or deduction eligibility requirements of Code Sec. 911(d)(1) because adverse conditions in a foreign country precluded the individual from meeting the requirements for the 2021 tax year. Qualified individuals may exempt from taxation their foreign earned income and housing cost amounts.


The Supreme Court reversed and remanded a Court of Appeals decision and held that Code Sec. 6330(d)(1)’s 30-day time limit to file a petition for review of a collection due process (CDP) determination is an ordinary, nonjurisdictional deadline subject to equitable tolling in appropriate cases. The taxpayer had requested and received a CDP hearing before the IRS’s Independent Office of Appeals pursuant to Code Sec. 6330(b), but the Office sustained the proposed levy. Under Code Sec. 6330(d)(1), the taxpayer had 30 days to petition the Tax Court for review. However, the taxpayer filed its petition one day late. The Tax Court dismissed the petition for lack of jurisdiction and the Court of Appeals for the Eighth Circuit affirmed, agreeing that Code Sec. 6330(d)(1)’s 30- day filing deadline is jurisdictional and thus cannot be equitably tolled.


The Government Accountability Office (GAO) has issued a report on IRS’ performance during the 2021 tax filing season. The report assessed IRS’ performance during the 2021 filing season on: (1) processing individual and business income tax returns; and (2) providing customer service to taxpayers. GAO analyzed IRS documents and data on filing season performance, refund interest payments, hiring and employee overtime. GAO also interviewed cognizant officials.


HOME-DaRosa Tax ServiceFIRM PROFILECLIENT SERVICESINFORMATION CENTERINDUSTRIESNEWSLETTERSFINANCIAL TOOLSLINKSCONTACT US ANYTIMEMANNY'S WEEKLY NEWS CORNER