According to Bloomberg News, the tax season of 2022, which was predicted by few, will be a “perfect storm” and has almost come to an end with hardly any stiff wind.
The scheduled deadline of April 18th, for the first time in three years, has been met as IRS or Internal Revenue Service successfully managed to process millions of individual returns despite complications that have arisen from the pandemic. Deferred due dates for 2020 to 2021 returns have created a lot of confusion for the taxpayers and have given rise to chaos within the IRS for updating the system.
This is in sharp contrast to what it was in January when officials of the Treasury had warned of challenges and a frustrating season, with delays in processing and shortages in customer service. A change in how the child tax credit was carried out in 2021, where a part of it was distributed as monthly payments, only means that many might have been witnesses to smaller refunds in the last few years.
Bloomberg News reports that the average refund for 2021 is $3,175, which is 9.9% higher than what it was in 2020. That was likely because of several credits expanded under the Biden administration’s $1.9 trillion American Rescue Plan.
Timeline for tax refund
One of the surprises for many people is the increasing attention of the IRS to the transactions that are taking place involving digital currencies as well as non-fungible tokens. Whereas a law requires that any transaction involving $10,000 in cryptocurrency be reported to the IRS, and this law is not coming into effect before 2023, it still involves reporting of sale and acquisition on individual returns.
This move has come as a surprise for many new crypto owners who have kept guessing why IRS is asking for the data.
A Washington state-based tax preparer, Nicole Rosen, has observed that there has been a significant increase among her clients that are using the services of Robinhood for selling and buying stocks. This adds to the complexness of the tax return process that requires additional forms.
The time to file tax returns has increased by at least two hours, which earlier used to take less time. However, specific IRS tools like using a platform to upload forms and power-of-attorney have made it easier and helped save a lot of time.
Bloomberg News reports that the Internal Revenue Service has worked around the clock on its paperwork. The backlog of paperwork returns has reached 24 million in the current year.
Recently, the IRS was approved for hastening to recruit as many as 10,000 new employees. The IRS Commissioner Chuck Rettig has said that this will improve customer service and shorten the time for processing tax returns.
