IRS warns of 'frustrating' refund delays as tax-filing season kicks off

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IRS Commissioner Charles Rettig warned Americans they could face delays receiving their 2021 tax refunds as the filing season kicked off Monday amid serious challenges for the agency.

In a Monday call with reporters, Retting urged Americans to begin preparing their taxes well ahead of the deadline, set up a direct deposit system with the IRS and file their returns electronically to avoid delays.

"This could be a very frustrating filing season for all taxpayers and tax professionals," Rettig said.

Coronavirus-related staffing issues, the implementation of several new stimulus programs and long-standing lack of congressional funding could lead to delays processing tax returns and handling taxpayer questions, he said.

"I want you to know that our employees are committed to do everything possible with an all hands on deck approach to get people the help that they need," Rettig said.

The IRS began accepting returns for 2021 taxes Monday and set a filing deadline of April 18 for the vast majority of Americans. Taxpayers in Maine and Massachusetts have until April 19 to file their taxes due to the observance of Patriots' Day on the national tax-filing deadline, and those requesting an extension have until Oct. 17 to file.

Rettig said the IRS is facing significantly more work with insufficient staff and outdated technology - two long-standing headaches for the revenue collection agency exacerbated by the pandemic.

The IRS was in charge of sending out the third round of stimulus checks, an expanded child tax credit and earned income tax credit all enacted through President Biden's $1.9 trillion March stimulus bill. The agency is also facing a backlog of unprocessed 2020 tax returns.

The agency is also bracing for an onslaught of questions from taxpayers who received federal unemployment aid or child tax credit payments. The rapid rise of cryptocurrency values and trading could also complicate returns for those who've made major purchases or sales.

Rettig said it would be difficult for IRS agents to handle a higher volume of calls and questions while the agency was still forced to telework and deal with coronavirus-related absences. He said the IRS received more than 10 million calls from taxpayers last year and urged those with questions to use online resources provided by the agency.

"We know people are struggling. We want them to know that we are doing everything that we can to help you want to deliver refunds quickly," Rettig said.

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