Warner raises alarm with IRS delays as Virginians wait for economic impact payments and tax returns

U.S. Sen. Mark R. Warner (D-VA) raised concern with the Internal Revenue Service (IRS) after hearing from an alarming number of Virginians who have yet to receive their second economic impact payment (EIP) or long-awaited tax return. These troubling delays come as millions of Americans find themselves in desperate need of a financial lifeline after continuing to face economic hardship due to the COVID-19 crisis.

“I am deeply appreciative of the Internal Revenue Service’s (IRS) work during the pandemic. The agency has delivered hundreds of millions of EIPs to Americans, all while managing the risks associated with COVID-19 and the need to protect our public servants at the IRS,” wrote Sen. Warner in his letter to Treasury Secretary Janet Yellen and IRS Charles Commissioner Rettig. “However, while the IRS has made an effort to provide timely and updated information on their website, my constituents continue to be frustrated with their inability to navigate some of the issues that are delaying their tax refunds and their second round of EIPs.”

As of November 19, 2020, there were an estimated 3.3 million pieces of unopened mail – including 1.6 million tax returns – at the IRS’s four Submission Processing Centers.

Currently, taxpayers who do not receive their economic impact payment must claim these funds by filing a tax return. This threatens to further delay needed payments and poses a particularly burdensome problem for Social Security recipients and other vulnerable populations, who may be forced to file a tax return despite not normally have a tax filing obligation.

In his letter, Sen. Warner also stressed the IRS’ responsibility to process individual tax returns and issue refunds as quickly as possible. In order to further understand the ongoing situation, Sen. Warner asked for answers to the following series of questions:

1. What is the current IRS backlog of paper tax returns and correspondence specifically at the Kansas City, MO location where Virginians’ tax returns are processed? When does the IRS project it will be finished processing the backlog? Can the IRS commit to providing more frequent updates on the backlog?

2. As the nation continues to work through the effects of the COVID-19 pandemic, what steps are the agency taking to prepare for the upcoming tax filing season and to process all returns, whether filed electronically or by U.S. Mail, as quickly as possible?

3. For taxpayers who have filed their Forms 1095-A and 8962, when can they expect to have that form processed by the IRS?

4. For the second EIP, how many payments have been successfully delivered? How many payments have been returned to the IRS? Why are some constituents who received the first EIP now having issues accessing the second?

During the COVID-19 crisis, Sen. Warner has been a strong advocate for Virginians, working to ensure that they get the funds to which they are entitled. Last April, he pressed the Treasury Department to ensure that families who are not normally required to file taxes do not need to wait until the following year to receive the additional $500 payment per dependent child that they were promised. He also successfully pushed the Treasury Department to allow Social Security recipients to automatically receive CARES Act direct cash assistance without needing to file a tax return.

Text of the letter is available here and below.

Dear Secretary Yellen and Commissioner Rettig,

I write today to express my concern with the alarming number of my constituents who have not received their long-awaited tax refund or the second economic impact payment (EIP). As you are well aware, millions of Americans are facing economic hardships and are desperately in need of these funds to help make ends meet.

I am deeply appreciative of the Internal Revenue Service’s (IRS) work during the pandemic. The agency has delivered hundreds of millions of EIPs to Americans, all while managing the risks associated with COVID-19 and the need to protect our public servants at the IRS. I applaud your responsiveness to Congress and the agency’s focus on delivering vital assistance to Americans in dire need of support. However, while the IRS has made an effort to provide timely and updated information on their website, my constituents continue to be frustrated with their inability to navigate some of the issues that are delaying their tax refunds and their second round of EIPs.

I understand that as of November 7, 2020, there were approximately 6.8 million individual paper return in various processing stages at the four Submission Processing Centers. Commissioner Rettig stated in his November 19, 2020, letter to my office that there were “an estimated 3.3 million pieces of unopened mail at these four locations, including 1.6 million tax returns.”

Since the November 19, 2020 letter from Commissioner Rettig, I have continued to hear from constituents that still have not had their 2019 tax returns processed or received their refunds. In addition, my constituents report that they have not received their second EIP despite many of these constituents reporting that they received their previous payment via direct deposit, and the agency’s Get My Payment Tool indicates their payment was authorized and mailed on January 6, 2021. Because taxpayers who do not receive their EIP must claim their payment by filing a tax return and claiming the Recovery Rebate Credit, many taxpayers face the possibility of even lengthier waits to receive their payment, including many who do not normally have a tax filing obligation. As you know, this population includes Social Security recipients and the most vulnerable in our county.

In addition, constituents continue to indicate that they are not receiving refunds due to lags in processing Health Insurance Marketplace Statements (Form 1095-A) and Premium Tax Credits (Form 8962), which are required if they receive their healthcare from the Affordable Care Act marketplace.

I appreciate the enormity of the challenges that the agency faces in trying to conduct its work while keeping its workers safe from COVID-19. However, the agency has a responsibility to process individual tax returns and issue all refunds that taxpayers are entitled to as quickly as possible and to be as communicative as possible.

To help me respond adequately to my constituents, please answer the following questions:

1. What is the current IRS backlog of paper tax returns and correspondence specifically at the Kansas City, MO location where Virginians’ tax returns are processed? When does the IRS project it will be finished processing the backlog? Can the IRS commit to providing more frequent updates on the backlog?
2. As the nation continues to work through the effects of the COVID-19 pandemic, what steps is the agency taking to prepare for the upcoming tax filing season and to process all returns, whether filed electronically or by U.S. Mail, as quickly as possible?
3. For taxpayers who have filed their Forms 1095-A and 8962, when can they expect to have that form processed by the IRS?
4. For the second EIP, how many payments have been successfully delivered? How many payments have been returned to the IRS? Why are some constituents who received the first EIP now having issues accessing the second?

I know the IRS is working diligently to serve the American people, and I welcome our continued collaboration to help Americans across the country. Thank you for your attention to this important issue.