3 Common Reasons for Tax Refund Delays
The IRS is a very efficient institution but every now and then someone inside makes a mistake. When this happens things like delayed tax returns tend to follow so it helps to have an idea of what can go wrong and how you can help the IRS fix the problem.
First of all, if you filed a correct tax return (electronically) and are due for a refund that will usually happen within 21 days. Paper returns take a bit longer (6 – 8 weeks) but in either case any delays beyond these periods should be chased up.
Delays are usually caused by a few common problems, namely:
- Incorrect payment details. This is a big one and can cause significant delays if not dealt with quickly. The biggest one in this regard is wrong bank account information – think a 9 instead of a 6. If the IRS sends the money to the wrong bank account the bank may turn the funds back. If the account listed exists but doesn’t belong to you, the payment may go through and the funds sit there indefinitely. In any case this has to be cleared up quickly if the refund is to reach its proper recipient.
- Manual verification becomes necessary. There are several reasons the IRS may need to verify the information found on a return but when it does need to verify things, a process has to kick in. Depending on the workload inside the IRS, verification can take anywhere from a couple of minutes to a couple of months.
- Another big one is processing backlog. Sometimes the IRS gets inundated with returns and just don’t have enough capacity to handle the processing. In this case you’ll probably get a notice of delay and you just need to sit tight until they clear things at their end.
There isn’t much else to tax refund delays than that. The important thing to keep in mind is that there’s seldom any reason to panic; the IRS has been dealing with delays for years so when something does go wrong you can be assured that they’ll fix it.