Is the IRS Waiting for Your Tax Account Information to Be Available?

Taxpayers often wait for the IRS to process their returns or update account information. Delays can stem from missing data, verification procedures, or third-party reports that have yet to be received. Understanding these factors helps set expectations and reduce frustration.

Required Data for IRS Review

The IRS reviews multiple data points when assessing tax returns and updating accounts. Key factors include reported income, deductions, and credits. If figures are incomplete or inconsistent with prior filings, additional time may be needed to reconcile discrepancies. Refundable credits like the Earned Income Tax Credit (EITC) and Additional Child Tax Credit (ACTC) undergo extra scrutiny under the PATH Act.

Prior-year filings and payment histories also play a role. Outstanding tax liabilities, penalties, or unresolved audits can slow processing. For example, if a taxpayer owes back taxes, the IRS may apply a current-year refund to that debt before issuing payment. Similarly, if a return is flagged for potential underreporting, additional review may be required.

Employer-reported data, such as W-2s and 1099s, are used for verification. If reported earnings don’t match employer-submitted records, the IRS may investigate further. This is particularly relevant for self-employed individuals and gig workers, whose income sources can be more complex.

Verification Procedures

After submission, the IRS checks returns for accuracy. One of the first steps is identity verification, which ensures the return was filed by the correct taxpayer. This process may involve cross-referencing Social Security numbers, taxpayer identification numbers (TINs), and prior-year adjusted gross income (AGI). If discrepancies arise, the IRS may request additional documentation, such as a government-issued ID or a verification PIN.

The IRS also examines filing status, dependents, and tax benefits to prevent fraudulent or erroneous claims. Taxpayers claiming dependents must provide valid Social Security numbers or adoption taxpayer identification numbers (ATINs). If a dependent appears on multiple returns—such as in cases of divorced parents—processing may be delayed until supporting documentation, like a custody agreement, is reviewed.

Amended returns (Form 1040-X) require separate reviews, which can extend processing times. If an amended return significantly alters reported income or deductions, the IRS may request further substantiation before finalizing adjustments.

Delayed Access to Third-Party Information

The IRS relies on external data sources to verify reported figures, but these third-party reports aren’t always available immediately. Employers, financial institutions, and government agencies submit forms such as W-2s and 1099s, which the IRS uses to cross-check income and deductions.

Employers must provide W-2s to employees and file them with the Social Security Administration (SSA) by January 31. The SSA then shares this data with the IRS. If an employer submits information late or makes corrections, processing may be delayed.

Investment income reported on 1099 forms can also cause delays. Brokerage firms and financial institutions have until February 15 to issue 1099-B, 1099-DIV, and 1099-INT forms, but corrections may be issued into March. Taxpayers who trade stocks or receive dividends may find discrepancies between their reported figures and IRS records, leading to review holds.

Government agencies add another layer of complexity. State unemployment offices issue 1099-G forms, but processing backlogs or fraud investigations can delay reporting. Taxpayers receiving premium tax credits through the Affordable Care Act marketplace must reconcile subsidies using Form 1095-A, typically issued by mid-January. Errors in these documents may require corrections before the IRS can finalize a return.

Internal Review Timeframes

Processing times vary based on the complexity of a return. Standard electronic returns with no flagged issues are typically processed within 21 days, while paper returns can take six weeks or longer due to manual handling. If a return is selected for further examination, the review period can extend significantly.

Certain tax scenarios trigger longer reviews. Large charitable deductions relative to reported income may require additional validation. Similarly, taxpayers claiming losses from pass-through entities like partnerships or S corporations may experience delays if the IRS needs to reconcile figures with entity filings. Carryforward losses or alternative minimum tax (AMT) adjustments can also extend processing times due to the need for detailed examination.

Communicating with Tax Authorities

When delays occur, taxpayers may need to contact the IRS. The agency offers multiple channels for inquiries, including its online account portal, automated phone systems, and direct assistance from representatives. The online portal allows taxpayers to check return status, view payment history, and access notices, reducing the need for direct contact. However, for issues requiring explanation—such as a pending review or an adjustment—speaking with an IRS agent may be necessary.

Reaching a representative can be difficult, especially during peak tax season. The IRS recommends calling early in the morning or later in the week for better chances of connecting with an agent. Taxpayers should have relevant documents on hand, such as their most recent tax return, IRS notices, and any related correspondence. If a return is under review, the IRS may provide a resolution timeframe, though this can change based on workload and case complexity. In some instances, taxpayers may be directed to the Taxpayer Advocate Service (TAS), which assists with prolonged or unresolved issues.

Potential Follow-Up Requests from the IRS

If the IRS needs additional information, it may send a formal request through a notice or letter. These communications outline the issue, required documents, and response deadlines. Common requests include income verification, proof of deductions or credits, and identity confirmation. Taxpayers may receive a CP05 notice if their return is under review for accuracy or a CP75 if additional documentation is needed for refundable credits like the EITC.

Responding promptly is crucial, as missing deadlines can lead to adjustments, refund delays, or penalties. If a taxpayer disagrees with the IRS’s findings, they can appeal through the Office of Appeals or request reconsideration. In cases where documentation is missing or incomplete, the IRS may disallow certain claims, resulting in a balance due. Taxpayers should keep copies of all correspondence and consider sending responses via certified mail to ensure proof of submission.