What ‘s the life cycle of an individual tax return?

[Anonymous]

IMO there must be a method to the madness. I highly doubt an agency that relies so heavily on precision can act as randomly as many of us perceive. Last year I started a thread entitled “Is there a Pattern” under the username E (I actually went by Typhoon Dragon as well but it’s a long story). Anyway, as I’ve been reading the posts here and elsewhere I realized that in order to determine if there was a pattern at all I would first have to understand what happens during the life cycle of an individual tax return. What’s actually going on between point A (the receipt of our forms at the IRS) and point B (the receipt of our refunds in our accounts)? For people to file and be accepted on the same day yet receive their refunds days or even weeks apart suggests that some returns must take more steps between points A and B than others. Any insight on this would be greatly appreciated by me and may prove to be very useful to all of us.

[Anonymous]

I can’t guarantee complete accuracy of the above post but it’s in line with what I’ve read from official sources. I copied and pasted it here because it’s an easy to read and understand shortened version of information that’s currently available but very time consuming to dig through and comprehend. Thanks to retiredsgt.

[Anonymous]

retiredsgt says:
February 4, 2013 at 3:51 pm

FYI:
The only things checked when your e-filed return is first submitted is a basic name-to-SSN match (first 5 letters of last name) and that none of the SSNs on the return have been used already. Birthdate to SSN checks are run on any children claimed on the return. I believe than any EINs from the W-2s are checked as valid/invalid as I’ve seen an occasional reject for a bad EIN.

Once it’s accepted the system runs the usual checks for math errors and basic compliance, i.e verifying that exemption and standard deduction values match filing status and number of claimed exemptions, etc. and that any claimed credits are legally entitled.

At this point returns are also reviewed for major fraud flags. Those vary from one year to the next and may even change during the season but popular ones are EIC fraud (dependents claimed as nieces and nephews, dependents moving around among taxpayers from one year to the next, self-employment income sufficient to qualify for a maximum EIC) and new for this year, the First Time Home Buyer Credit (qualifying purchase the same address as filed last year, duplicate claims using the same qualifying property address, no match with public property transfer records, etc.).

[Anonymous]

@TyphoonDragon I love your logic and your grocery store made me laugh! I’ve come to realize that there is definitely no rhyme or reason to returns this year but as long as it doesn’t take 3 weeks like it did last year I’ll be happy :)

[Anonymous]

Just because you file before somebody doesn’t mean you’ll be processed before them. There isn’t one waiting line there’s a whole bunch of waiting lines (servers). Try to compare it to checking out at the grocery store on a super busy day. Some lines (servers) are moving way faster and smoother than others. If your return is taking way too long then you’re probably in line (server) 5 with the lady ahead of you that has 150 coupons (deductions) that disputes prices (errors) then has to fill out a check and balance her check book prior to exiting the lane (server). Basically, that’s what it’s like. You’re in one of many lines and you may or may not get out fast depending on who and how many people are ahead of you in that particular line (server).

[Anonymous]

I just wanted to post this before I forgot. Not only may some returns take more steps between points A and B they may take different (slower or faster) routes. For example: Michelle and Maria are friends that are going to get their taxes done together. They work at the same place, make the same amount of money and everything on their returns will be identical except the names, and SSN’s. They walk into the tax preparation office together finish their taxes and walk out together. Now you would think they should get their refunds back the same day. But, Michelle’s return was sent to IRS server #1 (made up name) with a million returns already in it and Maria’s was sent to IRS server #2 (made up name) with only 100,000 returns in it. To make matters worse IRS server #1 happens to have a lot of complicated returns that need processed prior to checking Michelle’s return while server #2 has already processed Maria’s return. Needless to say, Maria gets her refund and Michelle remains in processing for a little while longer.

I’m sorry, I know that I may not have all of the facts but the concept is right.

[Anonymous]

I’m still trying to gather information. Consider everything I put in this thread part of a rough draft. Also, please feel free to correct me at anytime if I’m wrong about anything. I’d like to have correct information just like everybody else.

[Anonymous]

That sounds interesting. It would be especially nice to know why some returns/refunds get processed so quickly even when they were accepted later than others. I would like to know how some people got 2/1 Direct Deposit dates when they only started processing on 1/30.

[Author]

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