It’s been nearly a year since Lori Meyers and her husband filed their 2019 federal return, but they’re still waiting for their tax refund to arrive. The total amount the government owes them: $11,700.
“This has fundamentally changed the way I look at a refund,” Meyers, 55, said. “I used to look at it as I have a little extra taken out, and then I have a big windfall once a year, and I use it for helpful things. I will never do that again.”
Meyers and her husband are supposed to get $8,500 as a regular refund plus $3,200 in stimulus payments they should have received, but didn’t. But she has no idea when that money will arrive and neither does the Internal Revenue Service, which is still processing a backlog of 1.7 million tax returns from 2019, according to IRS Commissioner Charles Rettig. Not all necessarily require refunds.
“We expect to get through this, you know the term that we use, fortunately or unfortunately, [by] summer,” Rettig told the Senate Finance Committee on Tuesday. “Summer could be May or it could be September.”
‘The IRS has been the subject of funding cuts for at least a decade’
Aside from the complications from the pandemic, the backlog is also the result of a chronically understaffed agency.
Since 2010, the IRS has lost 21,000 employees and its budget has declined around 20% when taking inflation into account. It also had a hiring freeze in place from 2011 to 2018, making it harder to employ enough people to fill the jobs lost.
“The pandemic, as well as the longstanding budget cuts, are the two big reasons for a larger-than-normal backlog,” Samantha Jacoby, senior tax legal analyst at the Center on Budget and Policy Priorities, told Yahoo Money. “The IRS has been the subject of funding cuts for at least a decade, which likely made them less able to handle [the move to remote work] that they didn’t anticipate.”
‘IRS employees did not answer more than 75 million telephone calls’
In the meantime, getting in touch with the IRS has been onerous.
“You have to call very early in the morning and you're still going to be on hold for hours,” she said. “The longest I waited for somebody to pick up was maybe two and a half hours.”
Some of the backlogged returns were frozen by the IRS fraud filters, the National Taxpayer Advocate report found. For 1 in 4 returns flagged for income verification, it took refunds longer than 56 days to be sent. For nearly 1 in 5 flagged for identity verification, it took refunds over four months to be sent. That may be the reason Meyers’ refund has been held up.
“They said they put it aside for a reason, but they didn't know what the reason was,” said Meyers, who has been using an accountant for 28 years to prepare her taxes and has never had an issue before.
‘I shouldn't have to wait over a year ’
In March, a Treasury watchdog warned that taxpayers may face delays in getting their refunds this season because the IRS is still dealing with last year's backlog and faces difficulties hiring enough workers to process old and incoming returns. That warning appears prescient.
As of April 2, the IRS had processed 89.8% of the total tax returns it received, while last year at this time the agency had processed 95% of total received returns, according to agency data. Overall, the IRS has processed 8.8 million fewer returns this year compared with the same time last year.
That's bad news for Meyers, who was told in follow-up calls to the IRS that she may get her 2019 refund when she gets her 2020 refund. Meyers has yet to file her 2020 tax return.
“It is extremely frustrating that they use COVID as an excuse,” said Meyers who changed her withholdings so she never has to wait for a large sum again. “Short staff is one thing, but I shouldn't have to wait over a year for a refund and I shouldn't be locked out of the stimulus check because you guys aren't doing your job.”