Tax-return filing season is now open but continuing 'challenges' at IRS could affect Arizonans
The nation's tax-return filing season began Monday with the Internal Revenue Service starting to accept federal returns amid new complications and the specter of a difficult time ahead for some people.
Arizona tax officials haven't announced similar problems here, but any delays in filing federal returns will affect state returns, too.
Chuck Rettig, the Internal Revenue Service commissioner, and Ken Corbin, the agency's chief taxpayer experience officer, cited the word "challenges" several times in a roughly 50-minute call with the financial media as the agency began accepting and processing returns from individuals.
"We worked hard. We did our best. We didn't always get it right," said Rettig in discussing delays and other difficulties from last year's pandemic-tainted filing season, when the IRS didn't start processing returns until Feb. 12.
He also cited resource challenges for the agency, including funding shortfalls from Congress, and urged taxpayers to exercise patience, plan ahead and pay extra attention to accuracy.
Backlog from last year persists
The IRS still hasn't finished processing all returns and refunds from last year, and Congress added wrinkles affecting advance child tax credits, economic impact payments and more that could frustrate some households and the professionals preparing returns
"This filing season could be a unique one," Rettig said. "It could be a frustrating filing season, for both taxpayers and tax preparers."
Several groups, including the American Institute of CPAs and National Association of Enrolled Agents, have called on the IRS to mitigate likely service disruptions by temporarily easing penalties or providing other relief for taxpayers.
The senior IRS officials didn't mention any such plans, and they said there are no plans to delay this year's federal tax-filing deadline of April 18. Filers who submit extension requests can take until Oct. 17.
Still, Rettig predicted most people will receive refunds and have their 2021 returns processed quickly provided they file electronically, submit accurate returns and sign up to have refunds submitted into bank accounts using direct deposit.
Federal delays affect Arizona returns
Arizona also started accepting and processing individual tax returns Monday, and the state's Department of Revenue hasn’t announced any delays for the coming filing season.
However, state returns submitted electronically can’t be processed until the IRS has accepted a household’s federal return electronically, as Arizona returns rely on federal adjusted gross income as the starting point. That means federal delays and complications could affect Arizona returns, too.
About 85% of the individual returns received by the Arizona Department of Revenue last year were filed electronically. As on the federal side, paper returns will take longer to process in Arizona, with delayed refunds. People without bank direct-deposit services also could face delays in receiving their Arizona refunds.
This year’s normal filing deadline for Arizona is April 18, as with federal returns.
Federal taxpayers with modest income ($73,000 or less) can file free returns through the IRS Free File Alliance, but the departure of industry giant Turbo Tax leaves just eight software options in the program. Only four services — Tax Act, OLT (OnLine Taxes), Free Tax USA and 1040 Now — participate in Arizona’s Free File program.
The Arizona website, azdor.gov, has additional information about the state's tax programs including that for making in-person appointments.
Personalized help from IRS is elusive
The senior IRS officials urged taxpayers to try to find what they need and interact with the agency through irs.gov. Local IRS offices or Taxpayer Assistance Centers, in Phoenix and elsewhere, are open by appointment. Taxpayers have faced chronic challenges trying to reach in-person IRS customer representatives through the agency's toll-free phone line.
Seven IRS Taxpayer Assistance Centers around Arizona including three offices in metro Phoenix — in Phoenix, Glendale and Mesa — are accepting appointments to handle a range of topics including payments, tax forms and help with IRS letters or notices. Call 844-545-5640 to set up an appointment.
Compounding the situation, people who normally don't need to file returns likely will want to do so this time around to receive tax credits or other benefits. These include half of the child tax credit, an enhanced Earned Income Tax Credit and possibly stimulus payments that weren't paid in full to all eligible recipients last year, Corbin said.
Reach the reporter at russ.wiles@arizonarepublic.com.
Support local journalism. Subscribe to azcentral.com today.
This article originally appeared on Arizona Republic: Arizona, federal tax filing season started Monday. Here's what to know
