Q: What concerns from Iowans did you bring to the table to share with the IRS commissioner?
A: Conducting oversight of the Internal Revenue Service (IRS) helps me ensure the federal tax-collecting agency is serving tax-payers fairly and effectively.
Like everything else, the pandemic has affected operations at the IRS. Before tax-filing season got into full swing, the IRS delayed the April 15 deadline for nearly all filings and payments to give Americans flexibility during these unprecedented times. The extension gave breathing room to tens of millions of tax-payers for an additional three months. By mid-June the IRS had received 136.5 million individual tax returns and expects about 153 million to be filed.
The IRS recently confirmed that July 15 is the deadline to file 2019 returns and pay taxes owed. However, the IRS makes available a number of payment-options for tax-payers facing hardship. Check here for payment options. Tax-payers also may apply for an automatic extension until October 15 to file their tax return, provided they pay the estimated amount of taxes due by July 15. Be sure to follow IRS guidance to avoid penalties.
My office has received concerns from Iowans who’ve already filed their tax returns and still are waiting for their refunds. At the oversight hearing I conducted as chairman of the Senate Finance Committee, I asked IRS Commissioner Chuck Rettig about the federal agency’s efforts to address the backlog and process tax refunds. The pandemic hit America during the busiest time of the year for the IRS, imposing even more challenges to serve tax-payers. What’s more, the IRS was immersed with implementing policies enacted in response to the coronavirus pandemic, including tax-related provisions for small businesses that participated in the Paycheck Protection Program and new employer tax credits. The US Treasury and IRS had a tall order to fill in a short period of time. The federal government distributed over 160 million Economic Impact Payments to Americans by direct bank deposit, check, or pre-paid debit cards. The $1,200 direct assistance provided relief for cash-strapped Americans to help pay their bills and make ends meet.
Although the lion’s share of nearly $300 billion was delivered quickly, there were a few bumps along the way. I asked Commissioner Rettig to account for some of the problems. For example, some payments were delivered to deceased Americans or incorrect bank accounts. Some eligible recipients are still waiting for the $500 payment for dependent children, many of whom are non-tax filers, and used the IRS web portal to confirm their information. Commissioner Rettig said approximately 365,000 Americans, many of whom receive Social Security benefits, have not yet received their dependent payments. Although it’s unclear if Congress will approve another round of direct assistance, I want to be sure the IRS can iron out the kinks to avoid repeating these mistakes. When the federal government sends out money from the US Treasury, it needs to be doggone sure that payments go to eligible recipients.
Q: What other concerns have you heard from Iowans during this tax filing season?
A: My office has received lots of feedback from Iowans regarding the status of their Economic Impact Payment, their tax refund, and their use of pre-paid debit cards, to name a few. If your payment was lost, stolen, or destroyed, you may request the IRS to conduct a payment trace. The IRS also advises the window is closing on unclaimed refunds for the 2016 tax year. By federal law, tax-payers must file their returns within three years to claim a refund, otherwise the money becomes the property of the US Treasury. For most tax-payers, that means an unfiled 2016 tax return must be postmarked by July 15, 2020. There’s no penalty for filing late when a refund is involved. The IRS estimates unclaimed refunds for the 2016 tax year are worth more than $1.5 billion, including $15.7 million for approximately 14,700 Iowans. Tax-payers who are unable to obtain missing forms or wage information from their employers may order an income transcript from the IRS.
As a longstanding tax-payer watchdog, I’ll continue keeping close tabs on the IRS, including its implementation of the bipartisan Taxpayer First Act that directs the tax-collecting agency to modernize its organizational structure, update its information technology infrastructure, and foster a culture of customer service to better serve the American tax-payer.
