As Tax Season Begins, Millions Still Wait for Last Year’s Refund

As Tax Season Begins, Millions Still Wait for Last Year's Refund an illustration of the word taxes in the mold of an american dollar bill over the image of the capitol building (Dreamstime)

By Nicole Wells | Tuesday, 25 January 2022 05:12 PM

Tax season might officially be upon us, but millions of taxpayers say they are still waiting for last year's refunds.

Alysha Holliday, 30, of North Olmstead, Ohio, filed an amended return in April, after Congress changed the rules to make thousands in unemployment benefits tax-free, CNBC reported.

The IRS is still processing her refund nine months later.

"You have to call at seven in the morning or you will not be able to talk with someone," Holliday told CNBC. "I have called at 7:30 a.m., and the automated line has said that they are too busy and to call the next business day."

Experts say processing federal stimulus checks and disbursing the monthly child tax credit payments have contributed to the bottleneck at the agency and put added pressure on an insufficient number of employees handling a large volume of work.

Usually, the IRS receives 35 million calls during tax season; last year it received 119 million.

According to its annual progress report, the 81,600 employees at the IRS in fiscal year 2021, which includes 10,500 seasonal and temporary workers, was less than the number of permanent employees at the agency in fiscal year 2010.

Treasury Deputy Secretary Wally Adeyemo told CNBC the IRS needs more resources.

"Today the IRS has as many employees as they had in 1970, while the U.S. population has grown by 60%," he said. "This is because we failed to fund the IRS adequately."

President Joe Biden's Build Back Better plan included $80 billion to modernize the agency and increase enforcement; however, the bill has stalled in the Senate after Sen. Joe Manchin, D-W.Va., said he could not vote for the bill.

Sometimes waiting more than an hour and a half to speak with someone, Holliday said she is frustrated and doubtful she will ever see her money. She has documented all of her dealings with the IRS, including taking screenshots of the status of her return, according to CNBC.

The IRS backlog includes 9.8 million individual returns with errors and 2.8 million business returns, the National Taxpayer Advocate estimated.

Barry Melancon, president and CEO of the American Institute of CPAs, emphasized taxpayers should be patient because it could take several months before the IRS addresses an amended tax return.

Back in Ohio, Holliday said she is in tax limbo this year, unsure whether to file her return or wait until she receives last year's refund.

"It's not fair to the people who are doing what they need to do, by the timeframe that needs to be done," she said. "I feel like we're being penalized for it."