IRS delays are blocking Americans from getting thousands of dollars in returns. They’re struggling to keep their homes, afford childcare, and feed their families.

Mark Abriam, a student, is still waiting on his tax refund.

Some Americans have been waiting months for their tax refunds from an overburdened IRS.
The agency is underfunded and understaffed, and the impact is trickling down into people’s lives.
Taxpayers waiting on refunds said they were struggling with bills and cutting back on groceries.

Every morning at 6:58, Kathie Kong gets ready to call the IRS from her home in California.

But even when she calls at 7 a.m. on the dot — when the phone line opens — she gets the message that the agency has already hit its daily limit for calls.

Kong, 39, a healthcare worker and single mother of five, is still trying to get her 2020 tax refund. She filed an amended return in July, but she hasn’t gotten the roughly $5,000 she’s owed yet. Without a return, she also hasn’t received any of the advance child-tax-credit checks the Biden administration started sending parents in July.

“I pay for childcare just to go to work. It’s been hard because the money that I make is not that much and childcare is expensive,” Kong said. She added that getting her tax return and child-tax-credit money would mean she wouldn’t “have to worry about how I’m going to pay for childcare this month.”

Kathie Kong.

Erin Collins, the national taxpayer advocate, has said that as of mid-December, 6 million original tax returns were still unprocessed, and 2.3 million amended returns remained unprocessed.

Those returns represent millions of Americans waiting on money that they may rely on for essentials like groceries and childcare. The situation is a result of years of underfunding the IRS, whose workforce has also shrunk as its burden has grown. The pandemic caused its own difficulties with staffing and operations — and then Congress made stimulus payments and the child tax credit the IRS’s domain as well.

2021 was “the most challenging year taxpayers and tax professionals have ever experienced,” Collins said. But that backlog is more than just a pile of mail: Many families depend on tax refunds for basic expenses or as a financial buffer. Now those delays are hitting families in their wallets — and the country is heading into yet another filing season that Collins said she was “deeply concerned about.”

Cutting back

In Texas, Michael is waiting on nearly $20,000 from the IRS from his 2020 return.

Michael, 32, who wanted to withhold his last name for privacy reasons, filed an amended return in May. He said it was accepted that day, but he hasn’t heard anything from the IRS.

“I’ve made probably 15 calls to the IRS and about 10 calls to the tax-advocate service,” he said. When he calls the IRS, he said, nine times out of 10 he gets a recording saying it’s too busy and telling him to call back tomorrow.

Like Kong, he hasn’t been able to receive the advance child tax credit for his five children.

He said the refund was money he’d been planning to use throughout the year. Without it, his family has cut back on buying groceries, he said.

“We just started a standard list that we use when we go to the grocery store — not buying anything extra, like extra snacks that the kids might want, changing brands from diapers,” Michael said.

They’ve cut down on shopping for clothes too and ramped up preserving food. They recently bought about 18 more chickens, which he said would “knock out about 30 bucks a month in eggs.”

Research from the JPMorgan Chase Institute found that among millions of families with Chase checking accounts in 2015, 2016, or 2017, about half who received tax refunds got more money back from the IRS than what they already had in their bank accounts, and their spending tripled in the week after the deposit.

For Mark Abriam, waiting on a refund is affecting his schoolwork and personal life.

Abriam, 23, is a part-time college student in California hoping to go into the health field. Right now he’s financially independent and works as a valet. He filed an amended return in May and still hasn’t received the about $2,200 he’s owed.

“The refund definitely makes a big difference,” he said, adding that it would mean he wouldn’t have to work as often to pay for school or things like his internet bill.

“I have to take more time away from school, and I can’t do as much as I would be wanting to in terms of school and even my personal life, taking care of my mental health and whatnot and emotional well-being,” Abriam said. “It definitely makes a big impact on those.”

Worried about the future

Andrea Grant says she’s “scrambling to try to stay afloat.”

Grant, a 38-year-old in Wyoming who described herself as a lunch lady, is still waiting on nearly $9,000 from an amended return filed in April and supplemented with additional paperwork in May. That’s in addition to the advance child-tax-credit checks for her daughter and her granddaughter who live with her.

Andrea Grant and her granddaughter.

“I just wish that people would understand that there are people out there like me who struggle, who are single parents, and that depend on their tax returns to pay their bills and to stay afloat,” Grant said.

She said she was trying to come up with the funds to keep her house and pay her bills. She’s tried calling the IRS at least once a month, she said, once waiting six hours to talk to someone.

In the first half of 2021, the IRS had just under 15,000 people to handle 240 million calls coming in — amounting to roughly one person for every 16,000 calls.

When reached for comment, the IRS directed Insider to releases expressing the frustration of its commissioner, Chuck Rettig, with an inability to deliver the service taxpayers deserve and need; outlining the steps filers should take going into the 2022 tax season amid “enormous challenges related to the pandemic”; and saying its employees were working long and hard hours to assist taxpayers even while lacking funding.

Michael said he had thought he could rely on the government to “properly maintain the IRS with the adequate amount of employees.” He said he hadn’t had an issue in 10 years. Now he’s frustrated.

“I can’t believe it’s taking this long,” he said. “It’s going to be a year in May.”

Kong, the healthcare worker in California, said it was stressful not to know what’s happening. “At least send me a letter or something,” she said.

“Here we are, 2021 tax-return season,” Grant said. “It’s pretty scary thinking that I might not get this one either.”

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Economy, Markets, Economy, IRS, Tax refund, Tax Refunds, tax refund delays, tax refund delay, taxes 2022

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