What’s the holdup on my tax refund?
SALT LAKE CITY — Why is your tax refund taking so long? The IRS has been given a load of new responsibilities and is struggling, says a national tax expert.
Will McBride of The Tax Foundation, a Washington, D.C.-based think tank, spoke with Inside Sources host Boyd Matheson about its new report showing how Congress is offloading more and more social services onto the IRS, which slows its ability to process returns.
“The IRS is melting down,” by a backlog of 24 million paper returns from last tax season, awaiting action by the IRS, McBride said.
McBride said the IRS took on more responsibilities last year, including issuing all first, second and third Economic Impact Payments, which went out to 100 million Americans, and the new Child Tax Credit, which was turned into a monthly benefit, based on income, that the IRS had never had to deal with before last year.
“The IRS just became a sort of an emergency spending agency in addition to being a tax collector, and they just melted down,” McBride said. “That’s what we’re seeing this year.”
IRS weighed down by new duties…
Boyd pointed out that it’s never a good idea to advertise that the IRS is receiving more money.
“I don’t think any politician wants to say, ‘Yep, we are increasing the budget for the IRS. That’s a tough one to put on a bumper sticker in your re-election campaign,” he said.
McBride said the budget for the IRS has been flat for the past decade.
“There’s really no concern from Congress on how the IRS deals with this load [of new responsibilities],” he said. “We’ve reached the point where the IRS simply can’t can’t deal with it.”
McBride said the U.S. Tax Code is quite complex, but there’s no reason it needs to be that complicated. He said it all started with the Child Tax Credit in 1997.
“It really just became a bipartisan spending spree ever since then . . . and it’s costing about $200 billion a year,” he said. “The IRS should have nothing to do with it. It should be moved into a proper spending agency with proper oversight by Congress and run through the appropriations process annually.”
…and more may be coming
“The president today [Tuesday] rolled out his budget proposal framework for 2023, including some tax increases. Any initial thought in terms of what the president’s laying out and how that might play in Congress?” Boyd asked.
McBride said it is more of the same — new responsibilities for the IRS.
President Joe Biden’s “budget proposes a whole series of completely novel tax increases, such as this new 20% tax on wealthy individuals. A tax on their unrealized capital gains,” he said.
Under current tax law, stock holdings are not taxed until they are sold, McBride added.
“This is an attempt to value those stock holdings and then apply 20% tax to them. . . . This has never been tried anywhere on Earth as far as we can tell. And yet the law just says let the IRS deal with it. This is really irresponsible,” said McBride.
Contact the IRS to find out: Where’s My Refund?
Or call the IRS TeleTax System at 1-800- 829-4477 to check the status of your refund by phone.
Inside Sources with Boyd Matheson can be heard weekdays from 1 p.m. to 3 p.m. on KSL NewsRadio. Users can find the show on the KSL NewsRadio website and app.
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