Tax Refund Delay: Separating Fact from Fiction

Did you hear that tax refunds were going to be delayed until October? Yeah, that’s false. An article on a satirical website last fall fueled controversy that taxpayers wouldn’t get their refunds until many, many months after filing. It isn’t true. However, the Commissioner of the IRS has made comments that may make it seem more plausible. Leer en español.

Here’s the deal: Congress sets the IRS budget. In the last few years, funding for the IRS has been lowered. We’ve already seen some consequences of those cuts. Last year, the IRS was only able to answer about 60% of phone calls from taxpayers. This year, it estimates it will only answer about 50% of calls. That would be the lowest level since 2008, according to IRS commissioner John Koskinen. Additionally, lower funding levels mean:

1. You should expect to wait on hold for at least 30 minutes when you call the IRS – if you’re lucky to get through
2. The IRS will freeze overtime and hiring
3. The IRS may have temporary work stoppages or furloughs to control costs

So the question is: what does that mean for you?

For many people, it won’t mean much. It’s no secret that computers do much of the work processing tax returns these days. If your return looks a lot like it has for the last few years (no major changes or new forms filed), and you e-file, you can likely expect to receive your refund in about the same amount of time as last year.

The IRS still estimates that 9 in 10 taxpayers will receive their refunds within 21 days of when their return is received. You can check the status of your refund on the IRS website “Where’s My Refund.”

But… yes, there’s a “but.” But, if your return changed significantly, particularly if you are filing new forms related to the Affordable Care Act, it may take longer for you to receive your refund. How much longer, we don’t know. It won’t be the doomsday scenario of October, but it could be an extra week or more, according to news stories. That’s because the information on those forms will need to be verified with Health and Human Services. This isn’t a process that has happened, well, ever before. So it’s hard to anticipate whether it will add time – or how much – to the refund process.

This year you can self-attest whether or not you had insurance. Next year every taxpayer will have to furnish documentation of health insurance coverage, and the penalty for not having insurance coverage will be even greater.

Of course, we don’t want to leave you high and dry. If you have questions for the IRS and aren’t getting through, you can always reach out to H&R Block. We will do our best to help. Call or visit the office closest to you, call us at 1-800-HRBLOCK or utilize the online chat support that’s built into our online product.

We can’t make the IRS work any faster or get you that refund sooner. However, we are doing our best to make the wait a little more enjoyable. Instead of trying to pinpoint your “DDD” by requesting transcripts or searching the deep web for the latest speculative refund cycle chart (all bogus), take a little time and Unwait Your Refund. Best case, you’ll get a little extra something coming your way. Worst case, you’ll be distracted until you can check Where’s My Refund again.