These are some of the top pandemic-induced frustrations marking this tax filing season, both for tax preparers and their clients.
A recent survey by the National Association of Tax Professionals found that “only 4% [of tax preparers] think that taxpayers are knowledgeable about the tax law changes, which means longer conversations with their clients and chasing down documents needed to file their return.” The IRS recently mailed letters to taxpayers that report how much a filer received in the third round of stimulus payments, which the agency started sending out in March 2021.
“Absolutely no one remembers getting it,” said Texas-based enrolled agent Tynisa Gaines. And by “it” Gaines doesn’t just mean the letter, but the actual payment itself. She attributes it to the stress of the past two years. “People have blocked out 2020 and 2021.”
Even though many don’t recall it, her clients who were eligible had gotten both the payment and the letter, Gaines said. But she only can establish that after sending her clients on a treasure hunt. If they lost their letter, she tells them to use the IRS portal to retrieve information on their stimulus payments. For some, that process has proven too difficult or time consuming. So she then asks them to comb through their bank records for proof the stimulus money was deposited in their accounts last year.
Providing proof of actual payment and reporting the exact dollar amount is critical if the taxpayer doesn’t want the IRS system to flag their return for a discrepancy, which could delay them getting their refunds for weeks or months, Gaines said. On the bright side, she noted, clients whose returns were completed and filed electronically have gotten their refunds well within the 21-day window the IRS promises.