We recently shared with you that despite the gradual reopening of the IRS offices in June, the delays were likely to break all records in this second half of the year. Indeed, after three full months of inactivity, more than a quarter million of ITIN applications remained sealed in envelopes in Texas. As a matter of fact, even files sent last February are not yet catalogued in the U.S. tax system.
New information from the IRS now shows the extent to which the pandemic continues to affect the processing of refund claims. Indeed, it is estimated that 10M pieces of incoming mail remain in arrears as of the beginning of July. Worse still, the IRS has a backlog of 23.5M outgoing letters waiting to be sent.
It must be understood that despite all the will in the world, it will take many months to bring the situation back to normal. In fact, the IRS has a capacity to send out 1.5M letters per week. Without even considering the normal activity that is being added every day, we are talking about four months of delay just on what is already processed and requires a communication to be sent. Moreover, the IRS focuses first on urgent notices, and therefore mainly on Notices of Deficiency.
This monster stack of communications will only get worse as the 10M mailings are progressively catalogued and processed. Our many calls to the IRS at the moment all end with the same song. We are being asked to be patient, very patient, so that any new information is processed and communicated.
It is impossible not to mention that the offices that process Canadian gambling tax refund claims are located in Texas, where the COVID-19 crisis is accelerating. Even if this were to have no impact on the presence of employees and the opening of processing centers, the refunds normally expected in early summer could instead represent a Christmas present for the many clients who are waiting. It should be added that the IRS legally has until December 15th to process any claims received before June 15th before having to pay interest.
However, this situation demonstrates the importance of dealing with professionals when it comes to filing claims with the IRS. For our part, we remain in constant communication with the IRS and can ensure a close follow-up on behalf of our clients. Any problem that appears in the online database can also be resolved before the related letter is received. In this very special year, this is a difference of several months of processing.
If you have been deducted 30% on a casino or lottery win in the United States, it is virtually certain that some or all of that amount can be recovered. Gamblingtaxes.ca offers a turnkey solution, handling the entire process with the tax authorities on behalf of its clients. Contact us via this form for a free consultation.