The Notorious IRS – Mo’ Money Mo’ Problems

IRSThe IRS has a mo’ money mo’ problems problem. Or maybe it’s a NO money ‘mo problems problem. Which one is it? Let’s be real, we are all slightly traumatized tax nuts. But tax law changes and the economy leave the IRS holding the bag. It might be a surprise, but I’m not going to butcher the IRS in this post.

Are You a Tax Refund Realist?

Let’s be real…21 days for a tax refund isn’t really that long. Even a week or so longer isn’t too long. Is it realistic for us to be patient? Yes, probably. I think so.

We Are All Slightly Traumatized Tax Nuts

Every year it’s something new. Some refunds get delayed. But it’s not a lot in comparison to the number of returns filed each year. Despite this reality, when those of us are expecting money and we know there have been problems in the past, it makes a lot of people slightly neurotic about tax refunds. Let’s look at this some more…

Mo’ Money Mo’ Problems

Taxpayers and the IRS have a mo’ money AND a no money ‘mo problems problem. Now that was a mouthful. We know a lot of the holdups are because of fraud, but we also know a lot of large refunds are legitimate. It all boils down to needing more. More people claiming refundable credits. More people wanting their tax refunds asap. More people filing early. More fraud. The IRS has their plate pretty full and they need more resources to get the job done

Tax Law Changes and the Economy Leave the IRS Holding the Money Bag

In an economy where there has been slow growth and slow growth in workers wages, refundable tax credits are higher. This happens because people who fall below certain income limits claim higher amounts of refundable credits like the Earned Income Tax Credit (EITC). And because this credit is so large, it has been exploited with fraud. The IRS is pressured to place more scrutiny on these tax returns.

Surprise- the IRS isn’t the bad guy.

When laws change, they are charged with implementing and administering the law. In 2016 it was the healthcare mandate penalty, in 2017 the Path Act EITC and ACTC refund delay. It’s always something. But they need to change systems, policies, hire and train staff to make shit happen. Are they getting enough lead time and resources to do this? Let us know what you think in the comments below.

 

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What Others Are Saying:

  1. Carmosey

    day 20 today and it says ” your refund has been received and is being processed” hopefully that changes and we have some answer tonight. we have some bills we would like to pay off and it would be nice to be able to do that lol

    Reply
  2. Manic

    Although the IRS May not be the bad guy. You need to understand this one simple fact. We owe them money, and we go to jail. No questions asked, rarely any chance to make it work through financing. And you need a High End Finance Lawyer to even dig out of the hole.
    They have problems with laws and other issues, and are left holding the bag. Sure. Fine. But they can take all the time in the world to get what they need done. It’s like walking up to your employer and saying:
    “I want 2 years wages, right now.”
    It’s not right, in a real world situation it wont happen. So, why is it fair for them to bend the rules, yet not the regular community at large? We can’t choose to with hold paying taxes until we are in a better financial situation. So, why should they be able to with hold our returns. Gotten from them just as fairly as they get taxes paid to them. With no choice or chance to not do so.

    All I’m saying is this double standard is not right. And shouldn’t happen. Period.

    Reply
  3. TickedOffMamainFL

    While I will agree that the IRS isn’t “technically” the bad guy, to me they are.

    For one, if the issue of tax fraud and ID Theft is so rampant that it necessitated a LAW, then why was the IRS workforce cut down by 15% in the last 2 years consecutively? (One of my tax law classmates is a current employee at our local IRS office and has been complaining about this same issue for the past 2 years).

    Second, as I’ve stated in other forums here, there was already a system in place that would somewhat curb the fraud issue and would make more taxpayers happy. They used to send you a notice stating that they needed clarification from the taxpayer on whatever credit or line item on their return, and would only hold up the refundable portion of the issue(s) in question, but would release the earned portion of your refund. Why did they have to create a law that seems to me to be counterproductive at least and intentionally disingenuous at worst?

    If the general consensus at the IRS is that A) Most ID thieves and Tax cheats file early and B) the IRS is equipped AT THE START OF TAX SEASON to handle those issues (which we all know that even with the best intentions, they almost always are NOT), then why create a law that basically tells people who file early that the IRS is suspicious of their return and that they will have to wait past 21 days to even get a refund date, not a direct deposit???

    It’s beyond misleading for them to say on their website that 9 out of 10 taxpayers receive their refunds within 21 days, when really the statement is true IF YOU FILE AFTER FEB 15th. But…the IRS is also ENCOURAGING people to file early, thus encouraging people to become neurotic about their returns. Why? Because they need some returns to test their theories on.

    Now, how is that doing things responsibly for not only the taxpayer, but the government? I honestly believe that your second notion is more apt: they simply don’t have the money to pay us taxpayers back, even if there were no refundable credits to claim are the culprit. Perhaps, if they looked at the gaping tax loopholes that allow some of the biggest companies to skate by paying at the same rates at their lowest paid employees, then perhaps this wouldn’t be an issue. But that sounds too much like sound logic.

    Who knows what cockamamie laws they come out with next to “combat” issue that have been prevalent for almost a decade and a half. I, for one, just plain don’t like this law. I don’t see any benefit to we the taxpayer. I see a benefit for those who wish to control when we see a return on our investment in this country…

    Ok. Climbing off my soapbox, now…

    Reply
  4. Trucker's Wife

    Changing systems and hiring/training staff will cost them mo’ money, so I don’t think that they are putting in too much of an effort to do that. :)

    Reply