Where’s my refund? What about scams? Your tax questions, answered by an expert
A backlog of some 23 million of tax returns and other documents, coupled with historically low staffing levels at the Internal Revenue Service, has left many filers wondering when their tax refund might arrive.
To get some of most common issues and delays taxpayers encounter when filing, we checked in with Lou Ann Hyder, president of Lexington accounting firm W.R. Ramsey & Associates.
Here’s what she had to say about filing season, how to track the status of your refund, deal with advance payments and more. Don’t forget, the deadline for most filers is April 18.
The IRS is confronting a backlog of returns and has fewer staff to work with. What are you advising your clients about how long they should expect a refund to take and are they experiencing delays?
“Per the IRS, most tax refunds are issued within 21 days, but some will take longer if the return requires additional review, contains errors, or is affected by identity theft or fraud. Common errors this year can include incorrectly reporting stimulus check amounts and/or advance child tax credit amounts. Some taxpayers may forget to include W2 or 1099 statements from income earned in early 2021.
The best way to check the status of your refund is to visit the IRS’ official website and use the ‘Where’s My Refund?’ tool. Calling the IRS to check on the status will not speed up your refund. The agents will only be able to provide the same information found on that tool.”
What should people know about fraud, particularly scammers trying to file in their names?
“You may not know you are a victim of identity theft until you’re notified by the IRS of a possible issue with your return. Taxpayers should be alert to possible tax-related identify theft if any of these situations occur:
You get a letter from the IRS inquiring about a suspicious tax return that you did NOT file
You can’t file your tax return because of a duplicate Social Security number
You get a tax transcript in the mail that you did not request
You get an IRS notice that an online account has been created in your name
You get an IRS notice that your existing online account has been accessed or disabled when you took no action
You get an IRS notice that you owe additional tax or refund offset, or that you have had collection actions taken against you for a year you did not file a tax return
IRS records indicate you received wages or other income from an employer you didn’t work for
You’ve been assigned an Employer Identification Number but you did not request an EIN.
Tax season is prime time for scammers. The IRS reminds taxpayers to be aware that criminals continue to make aggressive calls posing as IRS agents in hopes of stealing taxpayer money or personal information.
Taxpayers should know that the IRS will not call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer.
Generally, the IRS will first mail a bill to any taxpayer who owes taxes. The IRS will also not threaten to immediately bring in local police or other law enforcement groups to have the taxpayer arrested for not paying. The IRS will also not demand that taxes be paid without giving taxpayers the opportunity to question or appeal the amount owed.
Email hoaxes are another red flag. Criminals involve victims by sending emails which appear to be from an IRS agent; however, the IRS does not use email to request personal or financial information.
Thousands of people have lost millions of dollars and their personal information to tax scams.
Protect yourself, stay informed, be vigilant and be on high alert.”
How will the Advance Child Tax Credit impact people’s refunds this year?
“Because everyone’s situation varies, the answer is, of course, ‘it depends.’ If a taxpayer’s income and tax situation in 2021 was identical to 2020’s situation, they could expect their refund to be lowered by around $200 to $500 per qualifying child (or if they owe, they would owe that difference).
With the COVID-19 pandemic, we’ve seen many changes both to tax law, as well as individual circumstances, so we advise consulting a tax professional to help you file your return and understand any applicable changes.”
What other common hang-ups do people have when filing?
“There are some tips to help taxpayers reduce tax-time stress. Each tax season comes with unique challenges, and this tax season is no exception. Often taxpayers are worried they may owe, particularly in years in which we’ve had a lot of changes to tax law. They may not know what documents they need this year, or what records need to be kept. They may be worried about experiencing delays, particularly if they had issues with delays over the past two years, or know someone who has.
Using an experienced tax preparer can help alleviate a lot of these hang-ups by doing a thorough review of each person’s tax situation, asking questions and explaining any changes.
Taxpayers should strive to keep good records to make tax preparation easier. Collect W-2’s, Form 1099’s and other income-related information. People who need to reconcile advance child tax credit payments or claim the recovery rebate credit will need additional information when they file. Taxpayers must have the total amounts of advance child tax credit payments to receive the remainder of their child tax credit and the amounts of their third Economic Impact Payment to claim a Recovery Rebate Credit.
Also, use e-file and direct deposit to avoid delays.”