4 Tips and Tricks for This Chaotic Tax Season| Latest News!

The IRS has a long history of enraging taxpayers, but this tax season may be unprecedented.

With the IRS still processing 11.8 million paper tax returns from past years, many of which sat in trailers outside processing facilities for months, any 2021 return requiring a human touch or containing a simple math error might be delayed for months.

While millions of individual taxpayers face unique obstacles preparing their forms this tax season, the IRS is unable to answer queries due to staffing shortages.

Making pandemic-related and advanced child-tax credit payments on 2021 returns is difficult for taxpayers.

The child tax credit is often claimed in full on a tax return, but many families received partial payments last year.

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“Many payouts were directly deposited, and many don’t even realize they got them, let alone how much,” says Jennifer Mosley, senior tax partner at Seattle accounting firm Moss Adams.

Chaotic Tax Season

4 Tips and Tricks for This Chaotic Tax Season

Many other taxpayers are unsure how to file 2020 taxes when their prior returns haven’t been processed.

Mr. Losi is the executive vice president of Piascik, an accounting business in Glen Allen.

Incorrect information about what forms to file and late sent tax payments are among the issues affecting taxpayers.

Paper filers aren’t the only ones facing issues. People who file returns with problems may also be delayed

—and this might be a big group: Its math errors on 2020 returns jumped to 11 million from 1.9 million the year before, partly due to uncertainty over the pandemic’s early stimulus payouts.

The epidemic is to blame for several IRS issues. As a result of the temporary legislation, the agency’s offices were closed for months during the start of the pandemic.

The issues precede Covid-19. Budget cuts to the IRS have hampered the agency’s effectiveness for over a decade.

The IRS had 20% fewer full-time employees in 2020 than a decade earlier, yet the volume of returns has continually increased.

The phone response rate is poor. Last year, the IRS had 16,000 employees answering 240 million phone calls, or 15,000 apiece.

Prior to the pandemic, the response rate was around 35%. This year, the IRS relocated 1,200 employees to call centers.

The lack of resources alarms Janet Holtzblatt, a senior fellow at the Urban-Brookings Tax Policy Center. “I never doubt the IRS’s ability to survive,” she says.

The agency’s job is to transform new legislation into particular regulations and processes that taxpayers may follow.

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A difficult duty when Congress passes laws fast.

For example, lawmakers rushed to approve the Tax Cuts and Jobs Act before the year ended.

The IRS prioritized critical measures, but it took until 2021 to finalize all 86 provisions, according to Garrett Watson, a senior tax policy analyst at the Tax Foundation.

Individual taxpayers bear the brunt. Experts and the IRS advocate the following steps to simplify tax filing.

Early electronic submission with direct deposit

Individual taxpayers can avoid the problems and delays by filing electronically and early. 81 percent of returns were e-filed in 2017.

When e-filing, taxpayers should avoid errors and choose direct deposit. Money-back is possible in 21 days.

Call the IRS on time.

The agency’s phone center is open from 7 a.m. to 7 p.m.

While the IRS prefers that taxpayers use irs.gov for answers, Angela Anderson, a certified public accountant, and advisor in Atlanta, says phoning before 9 a.m. on Tuesdays and Thursdays is your best bet.

Online record-keeping

Create an account at irs.gov/account to view your records. Tax credits or stimulus payments should be recorded in advance.

Put your account on hold.

You may be receiving erroneous IRS collection notices if you have unprocessed prior year returns that you meant to apply to a subsequent year.

The IRS may even remove funds from your bank account, she warns.

“Avoid this by requesting an IRS hold until your returns are processed,” Mosley advises.

Of course, this requires contacting the IRS. Keep aspirin on hand.

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