UPDATE FROM THE INTERNAL REVENUE SERVICE (IRS)
I. OVERVIEW
On December 28, 2021, the Internal Revenue Service issued an update on the backlog of cases due to the global Covid-19 pandemic. The agency issued guidance on several topics, including the length of time that the taxpayer can generally expect to wait, what the taxpayer should do and the status of several different types of returns.
II. HOW LONG WILL THE TAXPAYER BE AFFECTED BY THE BACKLOG OF RETURNS?
The Internal Revenue Service reported that as of December 18, 2021, there were 6.3 million unprocessed individual returns, including those with errors and special handling such as validation of the figures used to figure the Earned Income Tax Credit and the Additional Child Tax Credit. The number of returns with errors has been reduced from 9.8 million on May 1, 2021, to 42,000 as of December 18,2021. The returns are processed in the order received. The resolution of issues could take from 90 to 120 days depending on how quickly the taxpayer responds if additional information is required.
III. WHAT SHOULD THE TAXPAYER DO?
Most taxpayers do not have to do anything. The taxpayer can check online for the status of their refund.
IV. STATUS OF PROCESSING FORMS 1040-X, 941 AND UNEMPLOYMENT COMPENSATION EXCLUSION
As of December 18, 2021, there were 2.3 million unprocessed Form 1040-X’s. The processing time is around 20 weeks which is up from the normal 20. Similarly, there are currently 2 million unprocessed Form 941 returns. The unemployment compensation returns are being processed generally upon the level of complexity of the returns and therefore those will be prioritized in terms of being processed.
V. CONCLUSION
As always, thank you so much for being a client of the Flores Group, Attorneys & Advisors, PLLC. If you desire to have more information on the changes to trust law or trusts themselves, or if you desire to make changes to your estate planning situation, feel free to call our office and schedule an appointment.
Should you need additional information it will be our pleasure to assist you.
Sincerely,
Ruben Flores, Attorney & CPA
As requirement of the United States Treasury Regulations, you should be conscious of the fact that this notice has not been written to be used and it should not be used by the recipient to prevent penalties that could be imposed by U.S. Federal Law.
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