Ah, this nifty Hebrew word came about because of all the craziness that obtains with Israeli bureaucracies.  It is akin to a word that I learned back when I was about 7 years old when the New York Post used it in a headline.

My father explained it to me.  (Not quite, I might add.  My friends made the definition far more clear.)  My dad told me SNAFU meant- situation normal, all fouled up.  (Yeah, you guessed what the F really represents).

Balagan?  That is  the Hebrew word for chaos or fiasco.  About the same concept as snafu.  But, no need to involve vocabulary that may offend others.

A perfect introduction to the subject matter today.

This year, my clients have been bugging me.  Where’s my refund?  Why hasn’t the IRS processed my tax return? Didn’t we submit the return electonically a month ago?

They’re right.  Normally, one would expect the IRS to deliver our refunds in under 3 weeks.  Sometimes even in a week. Except the amount of fraud (sealing someone’s identity, claiming an Earned Income Credit that is not deserved) has forced the IRS to second guess a lot of submissions.

But, that’s really not the problem.

Here are the three big salient issues.  As reported by the Taxpayer Advocate Service of the IRS.  Who really does advocate for those of us who try to adjudicate problems with the IRS.

1. Congress mandated economic impact payments to go to about ½ of the USA citizenry.  To counteract the damage the pandemic has done to our economy.  Except when there’s a mandate  AFTER the calendar year changes (like in January), wanting the payments to be distributed in short order, simply means something else has to give.  Not to mention that the IRS must verify HOW MUCH an economic impact payment each of these citizens is supposed to get.  Obviously, this means that tax return processing is delayed.

If there is an inconsistency between the IRS records for EIP and the Recovery Rebate credit on the 2020 tax return, the IRS places the tax return in a “suspense” status.  And, then, we just wait for it to be cleared.  (Or not- as they process the rebate recovery over the course of a few months.)

2. Once we mention delayed tax return processing, we need to be totally honest. The IRS has a MOUNTAIN of unprocessed 2019 (yes, 2019!) paper tax returns.  The ones sent in last year when the pandemic shut down the IRS.
3. Then we have the manual review of 2020 tax returns (submitted electronically). I have at least 24 clients that are in this status- no refund, no approval, no further information.
4.  Then, there’s the issue that the US government decided to forgive the taxes due on unemployment for those whose income is below $ 150K.  To STOP folks from issuing millions of amended tax returns (further filling up the queue), the IRS has promised to review each tax return and adjust for the non-taxability of the benefit. Which means- of course- even longer delays in processing.  (But far fewer than if millions of amended tax returns were to flood into the agency.)
5. 

The good news- the IRS has processed some 90 million 2020 tax returns.  (Of these, some 68 million were due- and collected refunds.)  The problem?  About 160 million tax returns are going to be processed this year.

Right now, there are some 8 million returns in the Error Resolutions state.  Add to that some 5 million 2019 and 2020 paper returns.  5 million more with processing errors- or fraud resolution issues requiring taxpayer responses.  Oh, and 11 million business tax returns.

If you did the math, you can see we are talking about some 29 million returns- that will have to be MANUALLY processed.

Oh, yeah- and calling the IRS?   That just delays everything further, because the IRS is already short staffed.  So, answering the phone is not a high priority.   Which is why when I call, I know I’ll be on hold for hours.  (The IRS admits it is only able to answer- wait for it- 7% of the calls coming in!  And, that is because they are including the special lines they operate for folks like me- with numbers you are not allowed to us.  If they only used the standard 1040 answering line, their customer service response would be 2%.)

So, no.  I can’t check on your refund.  Unless you want to pay me for the time I wait for an answer.  That fee can be as much as $200 or more.