Wait for 2020 IRS Unemployment Tax Refunds to Continue

Bob Dyer and likely millions of other taxpayers are still awaiting refunds from the IRS for the 2020 tax year.

Earlier this summer, I wrote a column about Dyer, who retired as the Beacon Journal’s “column with attitude” in December 2020.

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He had a big problem with the IRS as he was still waiting for a tax refund due to a backlog since the start of the COVID-19 pandemic.

Dyer’s wait in June had lasted more than 16 months for what he calculated to be $1,027 from the IRS and $182 from the state of Ohio.

Now Dyer has been waiting for 21 months – and unfortunately there are no meaningful updates for him and the millions of others who are waiting. Believe me, I tried.

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Dyer’s situation

Here’s what happened with Dyer:

On February 19, 2021, Dyer filed his federal taxes electronically. He owed $2,559 and mailed a check, which was quickly cashed, he said.

In the summer of 2020, Dyer and other employees at Beacon Journal and Gannett, our parent company, had to take multiple week-long leaves. We applied for unemployment benefits for these weeks off.

On March 11, 2021, Congress passed the American Rescue Plan Act, which among other things allowed taxpayers to exclude from taxable income up to $10,200 of unemployment benefits paid in 2020 if your modified adjusted gross income was less at $150,000.

But taxpayers affected by this change were told not to change their taxes if they had already filed.

The IRS said it will automatically refund money — or apply the refund to tax debts — for people who have already filed their taxes by reporting unemployment compensation as taxable income.

Now what?

So Dyer and the others are still waiting.

In August, Dyer emailed me to say he had a letter addressing his May 17, 2022 application.

“We are working on your account. However, we need an additional 60 days to send you a full response on the actions we are taking on your account. We don’t need any additional information from you at this time.”

“OH MY GOD!!!” Dyer wrote to me at the time.

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In early October, Dyer emailed me again:

“Remember when I wrote to you in early August to tell you that the IRS had sent me a notice that they needed another 60 days to figure out my simple return? Well, I just opened another letter from them saying they still need 60 more days!

In the meantime, several readers have also contacted me asking if Dyer had heard any updates, as they were also waiting.

Tricia Nelson filed her return in February 2021 and paid taxes on her unemployment.

“Here it is, almost two years later, and I’ve (tried) contacting the IRS dozens of times. I’ve been told a few times that I’ll have my money within 60 days, and that date is come and go several times.

“I even opened a case with my US Senator’s office and haven’t done anything with it. I probably only owe a refund of about $500, but now it’s become the principal of the business,” she wrote.

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IRS Response

Tried to get an update from IRS Media Relations. I told Dyer and readers that I didn’t expect much from an update and especially not on their particular returns because the IRS says federal law prohibits it from commenting on specific taxpayers.

IRS spokesperson Bruce Friedland directed me to an IRS webpage that provides updates titled “IRS Operations During COVID-19: Mission Critical Functions Continue” . You can check it out by going to https://tinyurl.com/5ym38rmp

There are a lot of numbers and information on the page. Here are some highlights:

As of Nov. 4, the IRS had received 4.2 million unprocessed individual returns this year. This does not include unprocessed returns received before this year, such as outstanding returns filed in 2021 by Dyer and others.

Here’s what the website says about the status of unemployment compensation exclusion fixes:

“The IRS continues to review returns for the 2020 tax year and process corrections for taxpayers who paid taxes on unemployment compensation, to exclude compensation from income if it is To date, the IRS has issued more than 11.9 million refunds totaling $14.6 billion.Some taxpayers will receive refunds, while others will see the overpayment applied to taxes owed or owing. Other Debts The IRS will send a letter to affected taxpayers notifying them of the corrections, usually within 30 days of the completion of the corrections.

The information takes you back to a frequently asked questions page from March 2022.

When I asked for more information, Friedland said it was “an unknown number of people who are still waiting” for a refund or credit on the taxes they owe for the unemployment problem dating back to 2021.

“The IRS has not provided an update on when these taxpayers might expect the IRS to return to them,” he said.

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The National Taxpayers’ Advocate steps in

Erin Collins is the National Taxpayer Advocate. The Taxpayer Advocate Service is an independent organization within the IRS and “helps taxpayers resolve their IRS account issues, advocates on behalf of taxpayers, and works for systemic change to alleviate taxpayer issues,” according to information on its website.

It is unclear whether the Taxpayer Advocate Service can help taxpayers who are awaiting their 2020 unemployment refunds. The website is www.taxpayeradvocate.irs.gov and the Cleveland office phone number is 216-415 -3460.

The attorney’s website says the service is backlogged by at least four weeks due to the high volume of late processing requests from taxpayers. According to an FAQ, the service only helps with unprocessed 2020 returns filed by paper before June 21, 2021, which doesn’t cover Dyer or most of the other millions in his predicament.

In a recent three-part blog series, Collins shared even bigger numbers than the number shared with me by the IRS.

As of Oct. 21, the IRS had just under 8 million tax returns in its backlog.

“Millions of taxpayers continued to experience unreasonably long delays in repayments, as the IRS administered another filing season while simultaneously trying to catch up on its backlog carried over from the previous year,” Collins said. “Paper remains a serious problem and is its Achilles heel. The IRS is getting closer to its goals, but unfortunately millions of personal and business returns are still waiting to be processed, millions more have been withdrawn due to errors or discrepancies that need to be corrected, and millions of amended returns and correspondence still await processing.. For some, this filing season may have felt like Groundhog Day.“

She also acknowledged that some taxpayers are “even still waiting for pandemic relief benefits as the IRS continues to review and process unemployment compensation exclusion corrections and systematically issue refunds and corresponding notices to taxpayers on returns for the 2020 tax year”.

Dyer’s Last Word

Dyer just shakes his head about his expectation.

“It’s been so long now that I’ve been almost more amused than angry. Almost. But not quite,” he said. , when you miss your own deadline, write another letter telling me you need another 60 days? How about using that time to work on my stinky refund! »

Beacon Journal reporter Betty Lin-Fisher can be reached at 330-996-3724 or [email protected]. Follow her @blinfisherABJ on Twitter or www.facebook.com/BettyLinFisherABJ To see her most recent stories and columns, go to www.tinyurl.com/bettylinfisher