IRS Processing Times Improve; Automated Notices Returning
Six months ago, the IRS was facing record-long processing times and it was nearly impossible to speak to an IRS representative on the phone.
The IRS has made substantial progress across the board since then. The influx (or reallocation) of representatives has made contacting the Practitioner Priority Line a breeze. I have experienced wait times of less than 30 minutes consistently. I’ve also spoken to clients who have been able to speak to a representative using the taxpayer hotline.
2023 Filing Season Report Card
Overall, I think the IRS handled the 2023 filing season quite well. It has been just over a month since the individual deadline and there are only 3.8 million unprocessed returns. It may seem like a lot, but 2.4 million require error correction and 1.4 million are paper-filed returns that need to be processed manually. All other returns that were filed without error, have been successfully processed.
Of these outstanding returns, those with refunds due will be addressed first. So if you are waiting on a refund, your return will go to the front of the line. If you electronically filed your return, and have not received your refund within 21 days, your return may be one of the 2.4 million that needs additional attention. If you paper-filed your return, I would allow up to six months to receive the refund.
For those with a balance due, you will notice your payment was probably applied to your account before your tax return was processed. The IRS cashes checks first and asks questions later (especially with the looming debt ceiling crisis).
Automated Notices To Resume
Now that the IRS is back to normal operations, you can expect to receive any notices related to outstanding balances. While these notices were on “pause” during the busy season, it was recently announced the IRS will resume issuing them to taxpayers.
The IRS issues thousands of erroneous notices each year. Many of these notices are automated and require a response from the taxpayer. If you ever receive a notice from the IRS, it is important to:
Check the response date on the notice
Evaluate the balance due and compare it to your records
Contact the IRS directly if something seems incorrect
Respond appropriately by the due date to avoid delays or penalties
Do not ignore the notice. It was sent for a reason (even if incorrect). The potential error will not go away until it is addressed. In case the notice is accurate, it is best to address it before penalties and interest begin to accrue.