Not a day goes by in our business without:
– We call the IRS to get updates and address issues on certain files.
– Clients call us, justifiably exasperated with the ridiculous delays in processing their refund claims.
While the IRS admits that they are behind their usual processing times (read pre-COVID), they do not admit the magnitude of the problem. The Commissioner was only recently saying that he thought the situation would be completely resolved by the fall. The agents on the other end of the phone are still talking about another four to six weeks.
They are lying. The truth is this. The situation is absolutely out of control and it’s hard to see how it can return to normal for several more years.
One professional shared on Twitter this week, Ogden currently has 70 tractor trailers of unopened mail.” That’s a lot of paper! Russ Fox, a U.S. tax expert, took the liberty of elaborating on what that meant: An individual tractor trailer has a volume of 3,489 cubic feet; 70 of these would have a volume of 244,230 cubic feet. You could fit 1,826,967 gallons of fluid in 70 tractor trailers. That’s a lot of mail. Sure, Ogden does now receive all paper-filed individual returns for the western United States, but what the IRS is saying doesn’t make sense if the IRS is telling us the truth.
He adds a relevant assumption about what is causing such a situation: My suspicion is that a large amount of the 70 trailers are filled with returns waiting to be sent to federal warehouses. Because of Covid, most federal employees are working from home. Paper-filed returns are generally stored for years in federal warehouses. The IRS cannot send those returns from Ogden to various warehouses because the warehouses are closed. Thus, they fill tractor trailers waiting for them to reopen. These do not represent unprocessed paperwork; they are filled with processed paperwork that must be stored.
What does that mean, in plain English? That everything takes an absolutely ridiculous amount of time. Fox shares the delays currently observed and, unfortunately, we share his observations. As far as gambling refund claims are concerned :
– Processing time for an ITIN application: 4 to 6 months
– Processing time for a paper-filed return: 10 months
– Processing time for an amended paper-filed return: 12 months
– Response time for other correspondence with the IRS: 12 months
This last point is the most critical. The IRS makes a lot, I mean a lot, of mistakes in processing simple requests. They then send out paper correspondence. If we process these letters here on the day they are received, they then takes a year to be received and processed at the IRS! This means that one small problem on one application can lead to total delays of almost two years. This is absolutely unacceptable and ridiculous.
The situation should improve in the fall with the return of staff to the offices directly. However, there is no doubt that it will be years before we get back to the pre-Covid times of a few months for an application.
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.