Understanding "Return Being Processed" and Tax Refund Delays by the IRS

When you eagerly await your tax refund, seeing the status "Return Being Processed" on the IRS's "Where's My Refund" tool can be both hopeful and frustrating. It's a sign that your tax return has been received, but what exactly does it mean? In this detailed guide, we'll delve into the intricacies of this status, shed light on the potential delays caused by various factors, and provide you with valuable insights to navigate the situation effectively.

The Waiting Game: Unraveling "Return Being Processed"

If you've ever wondered what the "Return Being Processed" status entails, the answer is quite straightforward: not much has happened yet. While this update confirms that the IRS has indeed received your tax return, it doesn't imply that the refund is imminent. In recent times, the IRS has faced unprecedented challenges, including delays due to the Covid-19 pandemic, leading to a significant backlog and slower processing times.

Traditionally, the IRS strives to process tax returns and issue refunds within a 21-calendar-day period from the date of receipt. This time frame was even explicitly communicated by the IRS in January, underscoring their commitment to efficiency. However, the current landscape, characterized by pandemic-related tax changes and the introduction of child tax credit advances, has added layers of complexity to this year's tax season.

Navigating the Tax Refund Journey

For taxpayers seeking a swift refund, opting for electronic filing coupled with direct deposit remains the most efficient route. This approach not only expedites the processing time but also ensures that you receive your refund in the fastest possible manner.

In cases where your tax refund faces delays, it's essential to stay informed about your options. While you could contact the IRS for assistance, it's advisable to exercise patience and wait out the delays before subjecting yourself to additional stress. Given the current backlog, processing your tax return might take longer than usual – in some instances, up to 6-8 weeks.

Understanding the Reasons Behind Delays

Several factors contribute to varying processing times for tax returns. Some common reasons include errors in your tax return, such as an incorrect Recovery Rebate Credit, an incomplete submission, or the need for a general review of your tax return. Furthermore, your tax return might be impacted by identity theft or fraud, particularly if you're claiming an Earned Income Tax Credit or an Additional Child Tax Credit.

If your tax return includes a Form 8379, Injured Spouse Allocation, the processing time could extend to up to 14 weeks. This complexity highlights the importance of thorough and accurate tax filing.

Navigating the IRS Contact

Contacting the IRS for assistance can be a challenging endeavor. According to the Taxpayer Advocate, only about 1 in 9 calls to the IRS are answered, often accompanied by extended wait times. To increase your chances of reaching the IRS, consider calling early in the day or late in the afternoon, aligning with the IRS's operating hours in the Eastern time zone.

The Waiting Game and Interest Owed

Despite the delays, there's a silver lining. The IRS acknowledges that your money holds value, and they owe you interest on your refund. However, the IRS typically has administrative time, which is around 45 days, to issue your refund without interest. If the refund isn't issued within 45 days after the filing deadline (April 18), you may be entitled to interest owed by the IRS.

Conclusion

In the intricate world of tax refunds, understanding the "Return Being Processed" status and the associated delays is crucial for informed decision-making. Navigating the complexities of the IRS's processes, pandemic-induced challenges, and potential delays requires patience and awareness. By choosing electronic filing, staying patient during delays, and being aware of your options, you can make the tax refund journey smoother. Remember, your money holds value, and ensuring that you're informed and proactive can lead to a more satisfactory tax refund experience.

For any tax-related queries or assistance, our team is here to guide you through the process. As the April 18 deadline approaches, stay informed, stay patient, and navigate the tax refund journey with confidence.