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If the IRS owes you a past-due refund check, you'll 'absolutely' get it by end of year, commissioner says

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Key Points
  • IRS Commissioner Charles Rettig testified before members of a House oversight panel Thursday, March 17.
  • The IRS has a backlog of more than 20 million returns, which Rettig told Congress the tax agency would get to "absolutely before December" of 2022.
  • The IRS has issued more than 45 million tax refunds worth almost $152 billion in total as of Friday, March 18.

The IRS has more than 20 million unprocessed returns from previous years, some dating back to 2020. The backlog, caused by years of budget cuts, understaffing, and pandemic-related office closures, should "absolutely" be resolved by December, IRS Commissioner Charles Rettig told lawmakers Thursday.

"As of today, barring any unforeseen circumstances, if the world stays as it is today, we will be what we call 'healthy' by the end of calendar year 2022, and enter the 2023 filing season with normal inventories," Rettig said.

Rettig's assurance before the House Ways and Means Committee comes days after the tax agency announced plans to hire 10,000 new employees to help with the process.

Most of the refund delays were "due to discrepancies between amounts claimed on the returns and amounts reflected in the IRS's records," according to the National Taxpayer Advocate's annual report to Congress, which was released in February.

The most common discrepancy involved the Recovery Rebate Credit filed by taxpayers who didn't receive their stimulus checks, or Economic Impact Payments, the prior year. "The IRS issued more than 11 million math error notices to taxpayers due to Recovery Rebate Credit discrepancies with the IRS's records," the report said.

If you're due money, don't give up: "Stay on top of the IRS and state tax departments for what is rightfully yours," says certified public accountant Sheneya Wilson, the founder and CEO of Fola Financial.

While you may have waited on hold for hours with the IRS last year, "contacting the IRS and processing times actually have been a bit better in my experience for this year," Wilson says. "We've been able to resolve client problems and complete their tax history more quickly this year compared to last for sure."

The IRS owes you interest on late refunds

The good news is, the law requires the IRS to pay interest on any delayed refund checks.

If you don't receive a refund within 45 days after the deadline, the IRS will owe you interest. In 2020, the IRS owed many taxpayers interest on late refunds. The average interest payment was $18.

Depending on how long you've waited, you could be owed a lot more, says Howard Samuels, a certified public accountant at Samuels & Associates in Florham Park, New Jersey. "If you're waiting on a bigger refund, that could be real interest, and it compounds daily."

How to avoid delays in getting your refund this year

This year's filing deadline is just a month away. It was pushed back by three days, to April 18, because of a District of Columbia holiday.

To speed things along, "filing electronically with direct deposit and avoiding a paper tax return is more important than ever this year," Rettig said in a statement on January 10. The agency maintains it will issue most refunds within 21 days.

So far this tax season, the IRS has issued more than 45 million tax refunds worth almost $152 billion, as of March 11, the IRS reported Friday.

The average refund payment is $3,352 through March 11. That's $537 larger than last year's $2,815, but it may still change, since there are four weeks until the deadline.

If you've already filed, you can use the IRS Where's My Refund? tool online tool or through the IRS2Go app to check the status of your federal return.

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