Tax day is approaching again, this time with more normalcy than we've seen since 2019, the year before the coronavirus pandemic threw the country and the economy into a state of upheaval.
As of January 2022, the IRS says it has no plans to extend the filing deadline beyond its usual April date, as it did in both 2020 and 2021 to offer relief to taxpayers affected by the pandemic. The agency says it has also made headway in reducing backlogs amassed in those years and hopes that will translate to faster processing of returns and shorter wait times for tax refunds.
But the challenges presented by the pandemic are not even close to being fully in the rearview mirror. For one, the possibility of retroactive legislation — potentially in response to a new virus surge — is preventing the IRS from steamrolling ahead with a normal tax season. The IRS is also bracing itself for higher-than-usual mistakes and delays from taxpayers as the public acclimates to pandemic-era law changes.
For instance, taxpayers who took the advanced child tax credit in 2021 must reflect that on their returns, and it's possible that many won't, whether intentionally or unintentionally. Then there are the taxpayers who were eligible for the $1,400 pandemic relief check in 2020 and never received it. They are eligible to claim it on this year's return and receive it as part of their refund. Sorting out these issues and others will add to the agency's workload during an already-busy season.
To help taxpayers get a head start on reconciling their own records, the IRS has begun sending notices this month, informing taxpayers of how much they received in stimulus money and how much they might still be eligible to collect (and thus must file on their taxes). Tax returns with data that doesn't line up with the IRS's own records will have to be dealt with, which is likely to cause further delays.
Accountants are urging their clients to be patient, stressing that everyone will receive their money, it just might take longer than in a typical, non-pandemic year. For those who need to get in contact with the IRS, it is often more efficient to write a letter and wait for a reply as opposed to dealing with the frustration of calling and sitting on hold for several hours, often to get disconnected without ever reaching a live person.
Dealing with the IRS is never fun, and the frustration has ratcheted up to new levels fueled by dizzying rule changes and maddening delays. The agency wants taxpayers to know that for every frustration they're feeling, its employees are suffering through the same, many seeing their workloads double and triple as they focus on loosening up existing logjams while trying to tend to new returns that come in.
Speaking optimistically, the 2022 tax could be the most normal one in years. But what is normal these days?