The Internal Revenue Service was in turmoil when The Watchdog last checked in on it six months ago.
The IRS did not answer its phone. Callers who were able to connect were placed on hold and sometimes hung up on. There was an unread mail backlog, which contained unchecked tax returns. Refunds were very slow to arrive.
I spoke with Phil Williams of Grand Prairie this week, a 39-year IRS veteran who now works as a “IRS enrolled agent” representing clients before the IRS.
“What is the current situation?” I inquired.
“It’s almost the same,” he said. The agency is still understaffed.
The IRS informed delinquents that they may send them electronic mail, text messages, and so on.
What is the reason that millions of Americans are still waiting for their tax refunds? The IRS does not return phone calls.
The IRS is in disarray. You will not be able to reach them on the phone. A former IRS agent tells Watchdog Dave Lieber that mail to the IRS is “stashed away.” People frequently inquire, ‘Where is my refund?’
Courtesy of Capital One
According to the Journal of Accountancy, the backlog includes 16.6 million tax returns and nearly six million letters as of last month.
Here are 18 facts revealed by The Watchdog that you should be aware of before the April 18 filing deadline. (Please note that the deadline has been extended from the customary April 15th due to the Emancipation Day holiday in Washington, D.C. on the 15th.)
The IRS stated in January that it was ready for this tax season. Perhaps, but here are some pointers to prevent ending yourself in IRS hell.
1. “You can’t do anything with the IRS through the mail,” Williams explains. “It is preferable not to mail paper returns or payment checks.” If you can do it all online, that’s the ideal way to go. If you can’t do it online, send it certified mail so you have proof of when you mailed your tax return. Also, make sure you submit it to the Austin service centre. “There is nowhere else.”
2. Are you thinking of hiding that profitable bitcoin investment? For the second year in a straight, the first question on this year’s 1040 form is, “Did you receive, sell, swap, or otherwise dispose of any financial interest in any virtual currency at any time during 2021?” “Either yes or no.” According to the Wall Street Journal, the IRS considers all digital currency to be property for tax purposes. Capital gains and losses are required to be recorded. (This is Form 8949.)
3. Did you know that taxpayers who have their refunds direct deposited into their bank accounts receive their money the quickest?
4. Before making calls, writing letters, or scheduling an appointment, always consult IRS.gov for answers to your inquiries. If you do not already have an IRS online account, you can set one up. You can receive answers, check the status of your refund, and pay your taxes.
5. The Volunteer Income Tax Assistance programme assists people earning $54,000 or less per year, as well as people with disabilities, the elderly, and limited English speakers, in preparing their tax forms. Tax Counseling for the Elderly (for those aged 60 and up) is another option. Their phone numbers are both 800-906-9887.
6. I tested two of the main IRS phone lines that serve the general public. I contacted 844-545-5640 to check how difficult it is to schedule an appointment at a Taxpayer Assistance Center. My hold time was 15-30 minutes, according to a robot voice. The robot sent me to IRS.gov and advised me to type “appointments” into the search box. I did so and discovered five centres in Dallas, Farmers Branch, Fort Worth, Waco, and Tyler. All of them show that they are available.
7. I also contacted the main taxpayer line, 800-829-1040, and after going through a series of voice prompts, a woman picked up the phone, provided her name and badge number, and offered assistance. That wasn’t what I was anticipating.
8. If your 2020 return is still being processed, file your 2021 return now.
9. Recently, Jason Wheeler of WFAA-TV provided an excellent tip. If your 2020 taxes haven’t been completed yet and you’re attempting to file your 2021 taxes electronically, he says you’ll be asked for your adjusted gross income from your 2020 taxes before you can submit your 2021 taxes. Even if you know your AGI, he advises against entering it. If your 2020 tax return has not yet been submitted, enter zero in the blank space.
10. If you got a stimulus payment, you should have received “Letter 6419” from the IRS confirming the amounts to include in your current tax return. “Letter 6475” is the code for the child tax credit. You should not file your tax return until you have the exact amounts. If you did not receive a letter or are unable to locate yours, you can check your online account. But keep in mind that if you don’t utilise the correct values, your return will be reported for “math error.” (Note: In February, CBS News revealed that some of the letters had incorrect numbers. You can double-check your information at irs.gov.)
11. Eligible taxpayers who received advance child tax credit payments (you had to have a 17-year-old or younger in your family) must file a 2021 tax return to receive the second half of the credit, according to the IRS. Filing a tax return allows eligible individuals who did not receive the child tax payment to claim the entire credit.
12. Those who often do not file a tax return for a variety of reasons may do so this year if they qualify for specific credits (stimulus, advance child tax, or earned income tax) or have already paid some federal income tax by having taxes withdrawn from a paycheck, according to the IRS. Only if you file a return will you receive a reimbursement.
13. If you wish to submit your own tax return for free (and you earned less than $73,000 last year), you can use the IRS-approved “Free File” service, which you can access at IRS.gov. I haven’t tried it yet.
14. Some people who did not qualify for a third stimulus check or received less than the full amount may be entitled for a “Recovery Rebate Credit.” To qualify, you must file a tax return.
15. According to the IRS website, “the IRS believes that most taxpayers who complete a return with no difficulties will get their refund within 21 days of filing electronically with direct deposit.”
16. In terms of scams, don’t fall for phoney IRS agents who demand money, threaten arrest, or offer a tax refund. The IRS normally sends a letter, but make sure it’s genuine as well. If you receive such a call, the IRS requests that you record it and report it to 800-366-4484. Alternatively, send an email to firstname.lastname@example.org. In the subject line, type “IRS Phone Scam.”
17. Did you know that you can divide a refund into three different accounts? “Form 8888” must be completed.
18. Finally, in case you missed it, the IRS recently reversed its intention to require facial recognition software before granting access to your online account. The initiative was scrapped following a privacy uproar from Congress and others.