Has Anyone Received Their Refund After Being Under Review?
Explore the process and timeline of tax refunds under review, including reasons, documentation, and steps to take if your refund is delayed.
Tax season can be a stressful time for many, especially when refunds are delayed due to an under-review status. This situation leaves taxpayers uncertain as they await their refund while trying to understand the reasons behind the delay.
Reasons for Under Review
A tax return may be flagged for review due to discrepancies between reported income and data the IRS receives from employers or financial institutions. For instance, if a taxpayer reports $50,000 in wages, but the IRS receives a W-2 showing $60,000, this inconsistency can trigger a review.
Significant changes in deductions or credits from previous years can also prompt scrutiny. A sudden large charitable donation deduction without a history of such contributions, for example, may attract attention. Additionally, claiming credits like the Earned Income Tax Credit (EITC) can lead to a review due to the potential for errors or fraud.
Complex tax situations, such as self-employment income, foreign assets, or multiple income sources, increase the likelihood of a review. The IRS may verify reported income and expenses, particularly for taxpayers subject to self-employment tax or foreign income reporting requirements.
Additional Documentation Requests
When a tax return is under review, the IRS may request documentation to validate claims. This is often communicated through a notice, such as a CP05 or CP75, detailing specific areas under scrutiny. For example, if significant business expenses are claimed, the IRS might request receipts, invoices, or bank statements.
Requested documents vary based on the questioned claims. For charitable contributions, the IRS might ask for acknowledgment letters or proof of payment, such as canceled checks. For education credits, they may request Form 1098-T or proof of qualified educational expenses.
Responding promptly and accurately to these requests is crucial. Delays or incomplete responses can result in processing delays, adjustments to the return, or additional taxes owed. Taxpayers should ensure documents are clear, complete, and well-organized to facilitate the review. Keeping copies of all correspondence and submissions is also advisable.
Typical Refund Timeline
The timeline for receiving a tax refund depends on how the return was filed and whether it’s under review. Electronically filed returns without issues are typically processed within 21 days thanks to automated systems. Mailed paper returns can take six weeks or more due to manual handling.
For returns under review, the timeline is less predictable. The IRS may take additional time to examine documents and resolve discrepancies. More complex returns, such as those involving foreign tax credits or intricate investments, may require extended scrutiny.
Certain credits and deductions, such as the Child Tax Credit or the Earned Income Tax Credit, can also affect timing. By law, the IRS delays refunds for these claims until mid-February to allow for proper verification and fraud prevention.
Checking Your Refund Status
The IRS “Where’s My Refund?” portal provides a convenient way to track your refund. Taxpayers need their Social Security number, filing status, and refund amount as listed on their return to access this system. Updated daily, the portal offers real-time insights into refund progress.
The portal categorizes refund status into three phases: Return Received, Refund Approved, and Refund Sent. “Return Received” means the IRS has acknowledged your submission and begun processing. “Refund Approved” confirms the refund has been finalized and is ready to be issued. “Refund Sent” indicates the refund has been dispatched via direct deposit or paper check, depending on your selection.
Steps if No Refund is Issued
If your refund has not been issued, verify that the information provided is accurate. Double-check your Social Security number, filing status, and refund amount, as errors can cause delays. If the information is correct, contact the IRS directly. Be prepared for potential wait times, especially during peak tax season.
Delays may stem from unresolved issues with your return. If the IRS requests additional information or documentation, responding promptly can help expedite the process. Reviewing your return for errors, such as incorrect calculations or missing forms, may also identify the cause of the delay. Consulting a tax professional can provide guidance for addressing complex issues.