Why Are The Employee Retention Credit Refunds Taking So Long?

We’re currently working with about 120 employers to receive the Employee Retention Credit (ERC). Though the IRS has not outright denied any of the credits, to a larger extent, many are still waiting for their refund checks.

The returns that we were able to file electronically received their checks from the first quarter in four to five weeks. The returns that were amended had to be done by mail, given the rules. The IRS had originally told us that these would take four to five months. Most of those are taking even longer than that.

At the end of May, the IRS explained that the two main culprits were

1 – Changes in the procedures at the IRS to address C-19 protocols including working remotely and

2 – The sheer number of the refund requests

The IRS notes that like

“[m]any businesses in the United States, the IRS has also been impacted by COVID-19, which has caused delays in [its] services. These delays have impacted the IRS processing mail, tax returns, payments, refunds and correspondence. This has caused many businesses that filed for the ERC to experience a longer than anticipated tax refund.”

The IRS further said that as of early May, there were over 200,000 forms from periods before 2021, in the processing pipeline. They further stated that when the returns from the current period are added, the number grows to 1.9M unprocessed forms.

The Service has stated that it is taking steps to speed up the process, such as re-routing returns from offices that are overwhelmed to ones with a smaller processing load. The returns are being processed in the order received.

The IRS offered a telephone number to call if you have questions. That number is (877)791-4473. My experience with that number is that the wait times are ridiculously long. When you do get a person on the line, they can’t speed anything up because they only know what the computer tells them.

The IRS has noted that employers don’t need to take any further actions and have even asked employers not to call the number to check on their returns.

All of this runs contrary to reason. The idea behind the ERC was to get money out to employers quickly so that employees could be retained. Now it seems as if the money will arrive much later than anyone anticipated.

Be patient. It will come. The sooner we can get them in, the sooner the checks will be in the mail.

Let me leave you with this.

I’m surprised to be able to say that we’re still open. Even though the case numbers continue to rise, this time the politicians don’t seem to be in a hurry to do anything about it.

It’s going to be a beautiful weekend. If I were you, I’d get out and enjoy it. Find a beautiful outdoor patio for a romantic dinner with your significant other. Spend some time with your kids. Take them to the park or down to the lakefront. Let them run and enjoy the perfection that is nature.

Take some time for yourself. Sleep, exercise, or read a good book. Do something to center your soul. Only whatever God you pray to has any idea how long this will last.

We’re all going to get through this. Let’s get through it together.

Accounting Solutions Ltd. stands ready to complete our mission of protecting you, your family, and your business. If there is anything you need, whether you are a current client or not, you have but to ask. I’m here and I remain,

Sincerely yours,

Chris Amundson
Accounting Solutions Ltd.


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