IRS distributing tax refunds slower than usual this year after delayed start

IRS faces backlog amid new tax deadline

The IRS stopped processing paper returns at the end of March to comply with coronavirus-related social distancing and stay-at-home guidelines; Rich Edson reports.

The distribution of tax refunds is off to a slow start this year.

The Internal Revenue Service reported last week the total dollar amount of tax refunds was down 59.2% through Feb. 19, exactly one week after the start of tax season. The agency has processed just $47.7 billion in tax refunds so far this year, compared with more than $117 billion during the year-ago period.

That's because, in part, the IRS did not start processing returns until Feb. 12 as the agency copes with a backlog of unprocessed returns from last year. It also had to send out the second stimulus checks that Congress approved with the passage of the $900 billion coronavirus relief package in December.

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Tax season typically kicks off at the end of January. The usual deadline of April 15 remains in place, and an IRS official told reporters at the beginning of the year there are no plans to delay it.

The average refund issued so far this year is $2,880, a 7.8% decline from the 2020 average of $3,125.

The IRS did not respond to a FOX Business request for comment.

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In the first eight days of the 2021 filing season, the IRS has issued about 2.072 million returns per day. During the first 26 days of the 2020 filing season, the IRS said it distributed 1.44 million refunds on average. But the agency is still working its way through 6.7 million returns from 2019 that have not been processed as of Jan. 30.

Nearly 38% fewer federal income tax returns were processed through Feb. 19, when compared with the same time frame last year.

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But many remain concerned that the IRS is going into an extremely challenging year, considering it was still dealing with 6.7 million 2019 returns that had not yet been processed as of Jan. 30.

Americans should file their taxes electronically, the IRS said, projecting that nine out of 10 taxpayers could receive their refund within 21 days of doing so.

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