IRS dispels five myths about tax refunds
IRS representation in Houston
As the April tax-filing deadline approaches, the Internal Revenue Service understands that taxpayers are anxious to get details about their tax refunds. This has led to a number of common myths about refunds that often circulate on social media.
While there’s no secret way for taxpayers to find out when their refund will be issued, there are some key facts that can help people understand the refund process. Taxpayers should keep in mind the IRS issues nine out of 10 tax refunds in less than 21 days. And the easiest way to check on a refund is “Where’s My Refund?,” an online tool available on IRS.gov and through the IRS2Go app.
People can use “Where’s My Refund?” to check on the status of their tax return within 24 hours after the IRS receives an e-filed return or four weeks after a mailed paper return. The “Where’s My Refund?” tool is updated no more than once every 24 hours, usually overnight, so there’s no need to check the status more often.
Taxpayers should only call the IRS tax help hotline to talk to a representative if it has been:
- 21 days or more since their tax return was e-filed,
- Six weeks or more since their return was mailed, or when
- “Where’s My Refund?” tells the taxpayer to contact the IRS.
Below are five common myths about tax refunds:
Myth 1: Calling the IRS or a tax professional will provide a better refund date
Many people mistakenly think that talking to the IRS or calling their tax professional is the best way to find out when they will get their tax refund. In reality, the best way to check the status of a refund is online through the “Where’s My Refund?” tool at IRS.gov or via the IRS2Go mobile app. Alternatively, those without Internet access can reach “Where’s My Refund?” by calling the automated refund hotline at 800-829-1954.
Taxpayers eager to know when their refund will be arriving should use the "Where's My Refund?" tool rather than calling and waiting on hold or ordering a tax transcript. “Where’s My Refund?” has the same information available to IRS telephone assistors so there is no need to call unless requested to do so by “Where’s My Refund?”
Myth 2: Ordering a tax transcript is a ‘secret way’ to get a refund date
Ordering a tax transcript will not help taxpayers find out when they will get their tax refund. While taxpayers can use a transcript to validate past income and tax filing status for mortgage, student and small business loan applications and to help with tax preparation, they should use “Where’s My Refund?” to check the status of their refund.
"Where’s My Refund?" shows the processing of the tax return from receipt to completion. It will tell the taxpayer their tax return has been received and if the refund has been approved or sent.
Myth 3: ‘Where’s My Refund?’ must be wrong because there’s no deposit date yet
Updates to “Where's My Refund?” on both IRS.gov and the IRS2Go mobile app are made once each day – usually overnight. Even though the IRS issues most refunds in less than 21 days, it’s possible a refund may take longer for a variety of reasons including when a return is incomplete or needs further review.
This means that in some cases, a taxpayer who filed later may receive their refund sooner than someone who filed earlier in the season. The IRS will contact taxpayers by mail when it needs more information to process their tax return. Also, remember to consider the time it takes for financial institutions to post the refund to the taxpayer’s account or to receive a check in the mail.
Myth 4: ‘Where’s My Refund?’ must be wrong because a refund amount Is less than expected
There are several factors that could cause a tax refund to be larger or smaller than expected.
Situations that could decrease a refund include:
- Math errors or mistakes;
- Delinquent federal taxes;
- State taxes, child support, student loans or other delinquent federal nontax obligations; and
- IRS holds a portion of the refund while it reviews an item claimed on the return.
The IRS will mail the taxpayer a letter of explanation if these adjustments are made. Some taxpayers may also receive a letter from the Department of Treasury's Bureau of the Fiscal Service if all or part of their refund was reduced and offset to pay certain financial obligations.
Myth 5: Getting a refund this year means there’s no need to adjust withholding for 2019
Annual tax planning is for everyone. To help avoid an unexpected tax outcome next year, taxpayers should make changes now to prepare for when they file 2019 tax returns next year. This can mean adjusting tax withholding with their employer or increasing estimated or additional tax payments.
Checking withholding is important every year, and the IRS encourages people to do a Paycheck Checkup. This is especially important for anyone who got an unexpected result from filing their tax return this year because they had too much or too little withheld from their paycheck in 2018.
Alfredo Gaxiola has worked on numerous IRS problem cases and has successfully settled with the IRS to release liens on houses, bank accounts and wages and, if needed, setting a payment installment plan that is not burdensome for the client. He has conducted appeals before the U.S. Tax Court and obtained favorable resolutions in reducing the tax debt of his clients. Mr. Gaxiola served as Treasurer of Camara de Empresarios Latinos, one of the largest and strongest Hispanic organizations in the city of Houston. He has conducted financial and accounting seminars for the Houston Small Business Development Corporation, as well.
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