Here's What You Need to Remember: Delays associated with fraud protection measures threaten to add to the delays in receiving tax refunds that many people are already experiencing. The IRS has for many weeks been dealing with a major backlog of unprocessed 2020 tax returns that it began racking up in the weeks leading up to the May 17 tax day deadline.
Jeff Lavigne, a resident of a Dallas, Texas suburb and who suffers from chronic back pain, has had to put his plans to use his tax refund to pay for medical treatments on hold after his refund has been delayed for several weeks. Lavigne filed his taxes in mid-March but has been unable to claim his refund after the IRS flagged his return for potential identity theft. The agency requires that Lavigne confirm his identity, but he has been unable to do so with the IRS’ phone lines clogged and an online identification process nonexistent.
It is unclear how many people have had their returns held up for similar reasons this year, but the number is likely significant. Some 5.2 million tax returns were flagged for potential fraud, an increase of almost 50 percent from the year before. While most of these required income verifications, about 1.9 million of them instead required identity screens similar to those that have held up Mr. Lavigne’s return this year. Some of these identity screens resulted in significant delays to tax refunds, with about 18 percent of them seeing refunds delayed for more than 120 days.
Delays associated with fraud protection measures threaten to add to the delays in receiving tax refunds that many people are already experiencing. The IRS has for many weeks been dealing with a major backlog of unprocessed 2020 tax returns that it began racking up in the weeks leading up to the May 17 tax day deadline. Staffing problems that have left the IRS shorthanded have contributed to the delay in processing returns, as have the COVID-19 relief measures that were brought into being earlier this year that are tied to 2020 tax returns.
Also adding to the delay is the extra responsibility taken on by the IRS in distributing the third round of direct federal stimulus payments. The IRS has now sent out 169 million of these payments, and while it has done a commendable job of getting payments sent out to Americans quickly and efficiently, doing so has impacted its ability to process tax returns quickly.
Eli Fuhrman is a contributing writer for The National Interest. This article first appeared earlier this year.