Contributed by: PhillipB, FreeTaxUSA Agent, Tax Pro
Not receiving your tax refund when expected can be extremely frustrating. To make the issue worse, the IRS is not very clear as to why your refund is taking more time.
While FreeTaxUSA doesn't have any control over IRS refund processing, we can provide some ideas on why your refund could be delayed and steps to deal with it.
Common Reasons:
- The IRS opens its e-file season in January. However, they do delay processing returns with refundable tax credits until the middle of February.
- If you filed an injured spouse claim on Form 8379 with your married filing joint return, your refund will automatically be delayed by at least 11 weeks.
- Issues with the bank account information provided to the IRS.
Refunds can be delayed for many other reasons as well. However, in every case, the IRS will send you a letter to the address on the return to explain the issue. The letter will include instructions on what you need to do and an estimate of how long it will take to resolve the issue. Make sure you follow the instructions provided.
Less Common Reasons:
- Potential errors on the return:
- For example, a taxpayer files a tax return with little to no taxable income. Yet, the taxpayer reports estimated tax payments to the IRS. The IRS may delay the refund to verify that estimated tax payments were made. If the IRS finds that no estimated payments were made, they may adjust the return, change the refund amount, and mail a letter explaining the adjustment. When the taxpayer receives the letter, the taxpayer will compare the letter from the IRS with their own return and records. If they agree with the IRS’ adjustment, no further action is necessary. However, if taxpayer has recorded that payments were made, the taxpayer will need to follow instructions on the letter to provide the IRS with evidence of estimated tax payments.
- The IRS computers flag your return for potential identity theft:
- The IRS computer system may hold your refund if there are some indicators of potential identity theft. If this happens, the IRS will send you a letter with instructions to verify your identity.
- The IRS wants to verify your eligibility for refundable credits:
- The IRS computer system has certain algorithms that may flag returns with the Earned Income Credit, Child Tax Credit, or the Refundable American Opportunity Credit as being potentially erroneous. In this situation, the IRS will delay your refund and send you a letter asking for proof to support the credit or deduction you claimed.
- The IRS holds your refund because they require past returns to be filed:
- The IRS has almost all possible income information because of W-2 and 1099 forms. When a return is not filed, the IRS system uses the income information to figure out if the taxpayer would likely owe or get a refund if they filed the missing return. If there is an unfiled return with an anticipated tax due, the IRS may hold the refund until the missing return is filed.
- The IRS applies a refund to a balance due from a tax return they created on your behalf because you didn’t file:
- The IRS has all income information reported to them under a taxpayer’s name and SSN because of W-2 and 1099 forms. When a return is not filed, the IRS system uses the income information to figure out if the taxpayer would likely owe or get a refund if they filed the missing return. If there is an unfiled return with anticipated tax due, the IRS will create a substitute return with a balance due and apply a refund to that balance.
- Your tax return is under audit for prior years:
- The IRS may delay tax refunds if the taxpayer’s previous years are under audit. They should provide a letter explaining why, along with instructions of what is needed to resolve the audit within 6 months. Once the audit is concluded, either the refund will be released, used for any balance due created in the audit, or split – some will go towards unpaid taxes, and the rest will be issued as a refund.
Contact the IRS
If your refund has not come after 21 days of e-filing, and 4-6 weeks after mailing your return, you can contact the IRS by calling 1-800-829-1040. The phone lines are open from 7 am to 7 am in each time zone. Calling close to opening may be the best time to reach a live person at the IRS.
Also see: Held or Stopped Refunds - Taxpayer Advocate Service (irs.gov)
Check the IRS website, "Where's My Refund?"
More details. FreeTaxUSA Article: Where's my refund IRS Tool
