Professor of Accounting and Director of Temple’s VITA program Steve Balsam details the ways in which the COVID-19 pandemic has affected the IRS
PHILADELPHIA, September 1, 2020 — Thousands of Americans who filed their taxes have yet to receive their refunds. According to Steve Balsam of Temple University’s Fox School of Business, they could still be waiting for a while.
Due to the COVID-19 pandemic and the government shutdown, the Internal Revenue Service (IRS) stopped processing paper returns in March. That, coupled with the department being tasked with handling the distribution of CARES Act stimulus checks, has taxed the IRS like never before.
Relief might not immediately be on the way, either. Balsam, a professor of accounting who oversees Temple University’s Volunteer Income Tax Assistance (VITA) program, believes these problems could potentially even spill over into next year’s tax season.
We caught up with Balsam to gauge his thoughts on just how much the pandemic has turned things upside down for the IRS and what the future may hold.
Q: It seems like every week, a new story comes out about how a large percentage of Americans have still not received their tax refunds. Just how much has this pandemic affected the IRS?
A: It’s had an effect in so many ways. For one, the sands keep shifting and the filing deadlines keep moving due to COVID-19. To begin with, the IRS was understaffed, but then, they had to go work remotely due to the pandemic, and not every staff member was even able to do that. Beyond that, they had additional work to do as they had to process the economic stimulus payments. It was really the perfect storm, and that’s why things are still so backed up today.
Q: It seems like the majority of folks who have not received their refunds are because they filed them by paper. What’s the reason for that?
When the government shut down, the IRS basically shut down, too. If agents were able to work from home, they did, but they still had no way to receive paper returns. Even now, I’m not sure of how many agents are back in the office, but I’ve heard and read that the mail is backing up. At one point, I read a piece that there were 10 million unopened pieces of mail at IRS facilities. Paper returns take time, too, because when you file it by paper, someone ultimately then has to re-enter that information into a computer. If it can be avoided, you don’t want to file your taxes by paper because it can take just so long to get your refund. For those who are still waiting for a refund, you can check the status of it by using the IRS’ Where’s My Refund? Tool. Even still, it’s hard to really estimate how long it could be before everyone will receive their refund because things are so backed up. It could be several months.
Q: There has been talk of another stimulus package. Could that place further stress on the IRS?
A: Assuming the parameters are the same, if there is another stimulus package, you should just automatically get it, either by mail or electronically as you did the first time. This should actually be a lot smoother because they should have already collected the names and addresses and built out the database. Of course, if you have yet to receive your first stimulus check, you’ll likely face similar complications this time around, too. Folks can check the status of that via the IRS’ Get My Payment website.
Q: Thinking long term, how much could this affect the IRS moving forward? Do you see next year’s tax season affected as well?
A:I think there are a lot of people who did not get their tax returns done because they didn’t want to venture out, so I am expecting a lot of 2019 tax returns to be done in the spring of 2021. I think there are a lot of people who did not get their tax returns done, so a lot of people who will be filing two tax returns next year. There could be all sorts of negative consequences with that. But, that said, if they do file two returns electronically, it doesn’t really add much more stress to the IRS. That’s really the key.
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