It is a good day when your federal tax refunds arrive at your doorstep. In the past years, about 75% of filers received refunds against filing their federal income tax returns. Many people rely on such refunds to pay their debts or cover bills. Luckily, the turnaround time for tax return processing has sped up. This advancement began with the introduction of the IRS electronic filing or e-filing system. The IRS System is an implementation of automation to replace most of the manual steps used to process paper returns. In this article, we are discussing the reasons why the tax refund could be delayed.
The information given on a tax return is transmitted electronically to an IRS computer, automatically examined and processed. Refunds are then sent to the taxpayer’s savings or checking account by Direct Deposit. Electronic filing is faster and more accurate. These days the burden of avoiding delays depends primarily on the taxpayer’s simple errors or unintentional mistakes that can lead to a delay of your tax refund.
Reasons Why a Tax Refund Could be Delayed
Once you know the reasons or issues that cause for a delayed refund, you can take steps to avoid them.
1. Your Return Includes Inaccurate Information
If your e-filed tax return contains some mistakes or numerical errors, this can slow down the pace of your refund. If an error is detected, the return is earmarked for human review. Therefore, an IRS employee must comb through it to find the mistake. That can take days or weeks to the processing time.
2. Filing Too Early or Getting Late
It is good to get your taxes done as early as possible, but sometimes early filers may have to wait a bit for refunds. One reason is that the IRS may be working on making some changes such as updating security or processing tweaks due to changes in the tax code. The other reason is that the majority of taxpayers wait until close to the tax day deadline. Managing a high volume of returns will take time.
3. You Have Outstanding Debt
The IRS has the authority to garnish your tax refund if you are under certain types of debt.
Possible reasons for this could be:
- You defaulted on a student loan.
- You owe money for your child support.
- You owe money for paying previous taxes.
- Your spouse has outstanding debt, and you filed a joint return.
4. You’re a Victim of Tax Fraud
This occurs when someone uses or manipulates your personal information. The culprit files a fraudulent tax return and claims the refund in your name. The IRS identified approximately $15.7 million in fraudulent refund claims last year. If you think that you are a victim of tax-related identity theft, you should contact the IRS and the Federal Trade Commission to report fraud.
5. If You Filed a Paper Return
The IRS takes comparatively longer to process paper returns. (Approximately 6 to 8 weeks) You will wait longer for your refund than if you e-file. If you select paper return via certified mail, it will take the IRS even longer to process it. So, under paper return, you’ll need to file all amended returns as a paper return, which takes a long time for processing. Additionally, if you file electronically, and elect to receive your return as a paper check, this can slow down the process.
