How to Handle Client Expectations When it Comes to Refunds

The IRS reports that in the last tax year, it issued $437 billion in tax refunds, most of which were given to individual taxpayers. Since taxpayers are often anxious to receive their refunds and have questions or concerns, the IRS does everything it can to improve its electronic filing system and its refund direct deposit systems. It also works hard to speed up both of these processes.

The result of all of these efforts from the IRS is that taxpayers’ refunds are now issued in as little as ten days. Even when refunds take longer, they very rarely take longer than 21 days. The IRS has also issued a “Where’s My Refund” tool that allows taxpayers to know when to expect their refunds.

Tax practitioners are advised to make clients aware of the various tools, resources, and the steps that the IRS regularly takes to improve refund practices, all in an effort to assuage the fear and worry so often experienced by those who are awaiting tax refunds.   

When a Refund is Delayed…

Unfortunately, despite the best efforts and hard work of the IRS, refunds are sometimes delayed. A delay can happen for various reasons. Common ones include:

l  Increased scrutiny by the IRS, often applied when refundable credits are present on the tax return

l  Steps being taken to protect against fraud and identity theft

l  Possible errors on returns

Whenever a practitioner has a client with a delayed refund, the practitioner should go over these and other possible reasons for the delay, being sure to explain that delays are a good thing in most cases since they mean that the IRS is doing all it can to protect the taxpayer.

For excessive wait times, practitioners can look into the delay and its cause or possible cause further to help relieve some of the anxiety commonly felt by taxpayers. Both taxpayers and tax practitioners must remember to be patient throughout this process.