Christanine Brodis gathered her tax paperwork in February including a 1099-G for state unemployment compensation and a W2-G for some gambling winnings at MGM Grand Detroit, the only bright spot in a money-losing 2020. But she's looking at taxable income now.
Brodis, 48, sent her forms to a tax preparer by encrypted email, talked on the phone in her living room on a cold Saturday morning and had her 1040 prepared remotely as part of COVID-19 precautions taken now through the Accounting Aid Society in metro Detroit.
Now she waits and wonders.
The Detroiter, who has been out of work during the pandemic, is expecting a tax refund of more than $4,500 for 2020 via direct deposit.
She's hoping she'll see that money sooner than an anticipated refund for her 2019 income tax return, which is still hanging in limbo somewhere.
"It's been over a year now," Brodis said. "They accepted my taxes last year on Feb. 7. It doesn't seem like it should go that slowly, but there's nothing I can do to speed it up."
The COVID-19 pandemic turned the tax season upside down last year, and even now millions of people are still dealing with the aftermath in 2021.
The Internal Revenue Service said in mid-February that it had yet to process 6.7 million individual income tax returns for 2019, based on data through Jan. 30.
Getting those returns processed - and any refunds involved in hand - may require additional review, dealing with corrections and addressing some ID theft-related problems where the IRS will need to work with taxpayers, according to the IRS.
Most 2019 federal income tax returns have been processed. But the lingering problems are significant, enough that the House Ways and Means Committee is asking the IRS for answers and calling for the IRS to extend the tax return deadline for 2020 tax returns beyond April 15.
"One year later, another unique filing season is underway, and many of these same pandemic-related difficulties and challenges persist for taxpayers, practitioners, and the IRS," according to a letter dated Feb. 18 signed by U.S. Rep. Bill Pascrell Jr. (D-New Jersey), the chairman of the House Ways and Means subcommittee on oversight and others on the subcommittee. The letter was addressed to IRS Commissioner Charles Rettig.
Nobody ever wants to wait up to a year for a federal income tax refund. It's money that many people often use to cover holiday bills, winter utilities and even going to the doctor after delaying visits because they don't have the money.
But the backdrop of economic uncertainty surrounding the pandemic makes things even more troublesome for those who lost a job and had expected extra tax refund cash many months ago.
Some who faced headaches with those tax refunds said they had trouble getting their stimulus cash, too.
Errant tax notices trigger frustration
The confusion has continued into 2021. In early February, the IRS sent out notices to about 260,000 taxpayers nationwide that claimed that the people had not yet filed their 2019 tax return.
One small problem? Many of those taxpayers did file their 2019 tax returns promptly last year, but the IRS has not yet processed them.
Oops. Later the IRS issued a statement that essentially said don't panic or respond to the CP59 notice, if you did file a 2019 return.
"Due to pandemic related shutdowns, the IRS has not completed processing all 2019 returns at this time," the IRS noted in its statement.
"Therefore, the CP59 notices should not have been sent because some portion of the recipients may actually have filed a return that is still being processed."
"There is no need to call or respond to the CP59 notice because the IRS continues to process 2019 tax returns as quickly as possible. The IRS regrets any confusion caused by this mailing."
Naturally, many taxpayers who received these notices were nervous, according to Lori Moore, principal in the wealth management tax department for Plante Moran in Southfield, Mich.
Her clients, she said, knew they filed a 2019 federal income tax return last year back in April or earlier, so it was unsettling to hear otherwise.
Moore said the notices are automatically generated by the IRS systems, but taxpayers would want to consult with their tax advisers to confirm if their notice was sent in error, as many returns were sent but not processed.
"They're in the IRS system in some way, shape or form," Moore said.
IRS processing centers shut down early in the pandemic last year. Piles of paperwork sat untouched for months in truck trailers. The IRS last year acknowledged delays involving the filing of paper returns as a result of what it calls "COVID-19 mail processing delays."