IRS tax refund delays lock in thousands of Americans

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  • Some Americans have been waiting months for their tax refunds from an overburdened IRS.
  • The agency is underfunded and understaffed, and the impact is rippling through people’s lives.
  • Taxpayers awaiting refunds said they were struggling with bills and cutting back on groceries.

Every morning at 6:58, Kathie Kong prepares to call the IRS from her home in California.

But even when she calls at 7 a.m. sharp – when the phone line opens – she receives the message that the agency has already reached its daily call limit.

Kong, 39, a healthcare worker and single mother of five, is still trying to get her 2020 tax refund. She filed an amended return in July, but has yet to receive the roughly $5,000 $ owed to him. Without return, she also received none of the early child tax credit checks the Biden administration began sending parents in July.

“I pay for childcare just to go to work. It’s been difficult because the money I earn isn’t that high and childcare is expensive,” Kong said. She added that getting her tax return and child tax credit money would mean she “wouldn’t have to worry about how I’m going to pay for childcare this this month”.

Kathie Kong takes a selfie

Kathie Kong.

Kathie Kong.


Erin Collins, the National Taxpayers Advocate, said as of mid-December, 6 million original tax returns remained unprocessed and 2.3 million amended returns remained unprocessed.

These returns represent millions of Americans who are waiting for money they can count on for essentials like groceries and child care. The situation is the result of years of underfunding from the IRS, whose staff has also shrunk as its burden has grown. The pandemic caused its own staffing and operating difficulties — and then Congress also made stimulus payments and the Child Tax Credit into the realm of the IRS.

2021 has been “the toughest year taxpayers and tax practitioners have ever seen,” Collins said. But this backlog is more than just a stack of mail: many families depend on tax refunds for basic expenses or as a financial buffer. Now those delays are hitting families in their wallets — and the country is heading into another filing season that Collins said she was “deeply concerned about.”

Reduce

In Texas, Michael is expecting nearly $20,000 from the IRS starting when he returns in 2020.

Michael, 32, who wanted to keep his last name for privacy reasons, filed an amended statement in May. He said it was accepted that day, but he heard nothing from the IRS.

“I made probably 15 calls to the IRS and about 10 calls to the tax advocate service,” he said. When he calls the IRS, he says, nine out of 10 times he gets a recording saying he’s too busy and telling him to call back tomorrow.

Like Kong, he was unable to take advantage of the withholding tax credit for his five children.

He said the refund was money he planned to use throughout the year. Without it, his family cut back on grocery shopping, he said.

“We just started a standard list that we use when we go grocery shopping — not buying anything extra, like extra snacks the kids might want, changing diaper brands,” Michael said.

They have also reduced their clothing purchases and intensified food preservation. They recently bought about 18 more chickens, which he says would “lose about $30 a month in eggs.”

Research from the JPMorgan Chase Institute found that among millions of families with Chase


check accounts

in 2015, 2016, or 2017, about half of people who received tax refunds received more money from the IRS than they already had in their bank accounts, and their spending tripled within a week following the deposit.

For Mark Abriam, waiting for a refund affects his school work and his personal life.

Abriam, 23, is a part-time student in California and hopes to get into the health field. Currently, he is financially independent and works as a valet. He filed an amended return in May and has still not received the approximately $2,200 owed to him.

“Reimbursement definitely makes a big difference,” he said, adding that it would mean he wouldn’t have to work as often to pay for school or things like his internet bill.

“I have to take more time away from school, and I can’t do as much as I would like in terms of school and even my personal life, taking care of my mental health and so on and my well-being. -be emotional,” Abriam says. “It certainly has a big impact on those.”

Worried about the future

Andrea Grant says she is “hustling to try to stay afloat”.

Grant, a 38-year-old woman from Wyoming who describes herself as a lunch lady, is still waiting nearly $9,000 from an amended statement filed in April and completed with additional documents in May. This is in addition to advance child tax credit checks for her daughter and granddaughter who live with her.

Andrea Grant and her granddaughter.

Andrea Grant and her granddaughter.

Andrea Grant


“I just wish people understood that there are people like me who are struggling, who are single parents and who depend on their tax returns to pay their bills and stay afloat,” Grant said.

She said she was trying to find the funds to keep her house and pay her bills. She tried to call the IRS at least once a month, she said, once waiting for six hours to speak to someone.

In the first half of 2021, the IRS had just under 15,000 people to handle 240 million incoming calls, or about one person for every 16,000 calls.

When reached for comment, the IRS directed Insider to statements expressing frustration of its commissioner, Chuck Rettig, with an inability to provide the service taxpayers deserve and need; outlining the steps filers should take to enter the 2022 tax season amid “enormous pandemic-related challenges”; and saying his employees were working long, hard hours to help taxpayers even when they lacked funding.

Michael said he felt he could count on the government to “properly maintain the IRS with the right number of employees.” He said he hadn’t had a problem for 10 years. Now he is frustrated.

“I can’t believe it’s taken this long,” he said. “It’s going to be a year in May.”

Kong, the California healthcare worker, said it was stressful not knowing what was going on. “At least send me a letter or something,” she said.

“Here we are, 2021 tax filing season,” Grant said. “It’s pretty scary to think I might not have that one either.”

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