Tips for Accessing Your IRS Refunds

At ATS, we work on a daily basis with companies seeking to amend returns. Using strategies like the R&D Tax Credit and Cost Segregation allows taxpayers to go back and amend returns and generate refunds for taxes paid in prior years. In recent years, however, our clients have experienced increasing delays in receiving these refund checks. The IRS is supposed to issue refunds within 16 weeks of receiving a 1040X amended individual tax return. In reality, we find that when a 1040X is connected to changes in an 1120SX or 1065X, the IRS often acts slower in its processing. This article will explore the options taxpayers and practitioners can use to access information on an amended return’s status.

Until August of 2020, all amended returns had to be paper filed, therefore, requiring physical processing by an actual agent. A reduction in IRS staffing in recent years, as well as many agents now working from home, may be key contributors to the long delays in obtaining refunds experienced by some taxpayers. The COVID-19 crisis has also caused substantial delays in processing returns. Hopefully, the agency’s new amended return e-filing system will help alleviate this problem. In the meantime, if you or your client continue to wait on refunds from amended returns that have long since passed the 16-week mark, here are some helpful tips and tools that can be taken:

File Within the Respective Statutory Timeframe

Amended returns are more likely to be processed without question if they are filed within three years from the date that the original return was filed or within two years from the date that the tax was paid, whichever is later.

Where’s My Amended Return?

Passthrough entity taxpayers expecting refunds on amended 1040X filings can use the IRS’s Where’s My Amended Return portal to view the status of the return. The IRS recommends waiting at least three weeks after mailing the return before accessing this system.

Taxpayer Advocate Service

The Taxpayer Advocate Service is an independent organization within the IRS specifically focused on helping taxpayers resolve problems and recommending changes. Taxpayers or practitioners who have made multiple attempts to contact the IRS regarding the status of an amended return can use this service, which is located in every state

Practitioner Priority Service (PPS)

This service is designed to help tax practitioners get responses to inquiries regarding a client’s tax return or amended tax return. Practitioners are required to present a CAF number and can inquire about:

• Status of payments
• Explanations on IRS communications
• Providing general guidance on timeframes
• Providing transcripts of taxpayer accounts

If a practitioner has received various letters, notices, and/or phone calls from IRS agents resulting in a continual delay of return processing, the PPS may be able to help get to the bottom of certain issues.

In these times, it is not uncommon for taxpayers and practitioners to receive multiple letters or notices from the IRS resulting in a continual delay in return processing. Taxpayers are entitled to timely decisions regarding a return’s status. If you believe that the IRS has taken too long to provide a satisfactory answer or to release refunds surrounding an amended return, ATS recommends that taxpayers or practitioners pursue action, escalating through each of these steps. Please feel free to contact the professionals at ATS with any question or advice on this matter.