Bob Dyer and likely millions of other taxpayers are still waiting for tax year 2020 refunds from the IRS.
Earlier this summer, I wrote a column about Dyer, who retired as the Akron, Ohio, Beacon Journal’s “columnist with attitude” in December 2020.
He had a major beef with the IRS because he was still waiting for a tax refund due to a backlog from the beginning of the COVID-19 pandemic.
Dyer’s wait in June had been more than 16 months for what he has calculated to be $1,027 from the IRS and $182 from the state of Ohio.
Now, Dyer has been waiting 21 months – and there’s, unfortunately, no meaningful update for him and millions of others waiting. Believe me, I tried.
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Dyer’s predicament
Here’s what happened with Dyer:
On Feb. 19, 2021, Dyer filed his federal taxes electronically. He owed $2,559 and mailed in a check, which was promptly cashed, he said.
In the summer of 2020, Dyer and other employees of Beacon Journal and Gannett, our corporate parent, had to take several one-week furloughs. We filed for unemployment benefits for those furlough weeks.
On March 11, 2021, Congress passed the American Rescue Plan Act, which among other things allowed taxpayers to exclude from taxable income up to $10,200 in unemployment compensation paid in 2020 if your modified adjusted gross income was less than $150,000.
But taxpayers affected by this change were told not to amend their taxes if they had already filed.
The IRS said it would automatically refund money – or apply the refund to tax debts – for people who already filed their tax return reporting unemployment compensation as taxable income.
Now what?
So Dyer and others still wait.
In August, Dyer emailed me to tell me he had a letter addressing his inquiry from May 17.
“We’re working on your account. However, we need an additional 60 days to send you a complete response on what action we are taking on your account. We don’t need any further information from you right now.”
“OMG!!!” Dyer wrote to me at the time.
In early October, Dyer emailed me again:
“Remember when I wrote you in early August and said the IRS sent me a notice that they needed 60 more days to figure out my simple return? Well, I just opened another letter from them that said they still need 60 more days! I kid thee not!”
In the meantime, several readers have also reached out to me to ask whether Dyer had heard any updates because they were waiting too.
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Tricia Nelson filed her return in February 2021 and paid taxes on her unemployment.
“Here it is, almost two years later, and I have (tried) to contact the IRS dozens of times. I have been told a few times that I would have my money within 60 days, and that date has come and gone several times.
“I even opened a case with my U.S. Senator’s office and got nowhere with that. I am probably only owed about $500 refund, but now it has become the principal of the matter,” she wrote.
IRS response
I tried to get an update from the IRS media relations department. I told Dyer and the readers that I wasn’t expecting much of an update and especially not on their particular returns because the IRS says federal law prohibits it from commenting on specific taxpayers.
IRS spokesman Bruce Friedland directed me to an IRS web page that provides updates titled “IRS Operations During COVID-19: Mission critical functions continue.” You can look at it by going to https://tinyurl.com/5ym38rmp
There are a lot of numbers and information on the page. Here are some highlights:
As of Nov. 4, the IRS had 4.2 million unprocessed individual returns received this year. That does not include unprocessed returns received before this year, such as the outstanding returns filed in 2021 by Dyer and others.
This is what the website says about the status of unemployment compensation exclusion corrections:
”The IRS continues to review tax year 2020 returns and process corrections for taxpayers who paid taxes on unemployment compensation, to exclude the compensation from income if eligible. To date, the IRS has issued over 11.9 million refunds totaling $14.6 billion. Some taxpayers will receive refunds, while others will have the overpayment applied to taxes due or other debts. The IRS will mail a letter to affected taxpayers to inform them of the corrections, generally within 30 days from when the corrections were completed.”
The information leads you back to a frequently asked questions page from March 2022.
When I pressed for more information, Friedland said this is “an unknown number of people still waiting” for a refund or credit against taxes they owe from the unemployment issue dating back to 2021.
“The IRS did not provide an update on when these taxpayers might expect the IRS to get back to them,” he said.
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National Taxpayer Advocate weighs in
Erin Collins is the national taxpayer advocate. The Taxpayer Advocate Service is an independent organization within the IRS and “helps taxpayers resolve their IRS account issues, advocates on behalf of taxpayers, and works towards systemic change to mitigate taxpayer problems,” according to the information on its website.
It is unclear if the taxpayer advocate service can help taxpayers who are waiting for their 2020 unemployment refunds. The website is www.taxpayeradvocate.irs.gov and the Cleveland office phone number is 216-415-3460.
The advocate’s website says the service is on at least a four-week delay because of the high volume of requests for taxpayer processing delays. According to a FAQ, the service is helping with only unprocessed 2020 returns filed by paper before June 21, 2021, so that doesn’t cover Dyer or most of the other millions in his predicament.
In a recent three-part blog series, Collins shared some numbers that are even larger than the number shared with me by the IRS.
As of Oct. 21, the IRS had just under 8 million tax returns in its backlog.
“Millions of taxpayers continued to endure unreasonably long refund delays, as the IRS administered another filing season while simultaneously trying to catch up on its backlog of work carried over from the previous year,” Collins said. “Paper remains a serious problem and is its Achilles heel. The IRS is getting closer to meeting its objectives, but unfortunately, millions of individual and business returns still await processing, millions more have been pulled out due to errors or discrepancies that must be addressed, and millions of amended returns and correspondence are still awaiting processing. For some, this filing season may have felt like Groundhog Day.“
She also acknowledged that some taxpayers “are even still waiting for pandemic relief benefits as the IRS continues to review and process unemployment compensation exclusion corrections and systemically issue corresponding refunds and notices to taxpayers on tax year 2020 returns.”
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Dyer’s last word
Dyer is just shaking his head about his wait.
“It has now been so long that I’m almost more amused than angry. Almost. But not quite,” he said. “Why take the time to write a letter telling me you need another 60 days to figure it out – and then, when you miss your own deadline, write another letter telling me you need another 60 days? How about using that time to work on my stinking refund!”
Beacon Journal staff reporter Betty Lin-Fisher can be reached at 330-996-3724 or [email protected]. Follow her @blinfisherABJ on Twitter or www.facebook.com/BettyLinFisherABJ To see her most recent stories and columns, go to www.tinyurl.com/bettylinfisher
This article originally appeared on USA TODAY: Unemployment tax refund 2020 still stalled as IRS struggles to catch up
Source: https://finance.yahoo.com/news/irs-still-processing-2020-unemployment-171218347.html