The Mystery of 10 Million Missing Tax Returns

data chartWhile tax professionals’ efiling pace remains stalled, DIYers grow by 4 million.

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By Beth Bellor

With less than a month to go before 2020’s extended tax deadline, the grind continues.

MORE: Tax Pro E-Filings Down 20 Percent | IRS Web Traffic Doubles over Year-Ago | COVID Drowns IRS in New Filings | 2020 Tax Season Comes to a Screeching Halt | The Tax Season 2020 Dumpster Fire | Tax Pros Fall Behind 6.2% in Returns Filed
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And the question is: Where are 10 million tax returns that should have been filed by now by professionals?

Are they sitting on desks, in files, and on the computers of the nation’s tax practitioners?

Or have they been forever lost to do-it-yourself taxpayers?

Have those taxpayers disappeared with the 40 million jobs lost in the COVID recession?

Will the tax business make up for lost ground with less than four weeks to go in the COVID-extended season?

The questions are troubling. And the answers may be more so. Do the math: it’ll take another 8 million tax returns to match last year’s IRS intake. How many of those will be done by professionals? And how many will be done by DIY taxpayers?

Does it signal a tidal shift in the bread-and-butter business of the accounting profession?

The IRS had received 136.5 million individual income tax returns as of the week ending June 12, the latest data available, down 5.3 percent from the same period in 2019. It had processed 124.6 million returns, down 12.2 percent.

The agency had processed 91.3 percent of returns received.

E-filings

A total of 124 million returns had been filed electronically, down 4.4 percent. Of those, 63.1 million were prepared by tax professionals, down 13.8 percent, and self-preparers handled 60.9 million, up 7.7 percent.

The pros processed 50.9 percent of e-filings.

Website visits

Visits to IRS.gov numbered 1.28 million, up 159.8 percent.

Refunds

Refunds numbered 92.2 million, down 11.8 percent, in the total amount of $255 billion, down 10.7 percent. The average refund of $2,767 was up 1.2 percent.

Direct deposit refunds numbered 76.7 million, down 13.4 percent, in the total amount of $223 billion, down 12.5 percent. The average direct deposit refund of $2,907 was up 1 percent.

2 Responses to “The Mystery of 10 Million Missing Tax Returns”

  1. John Stone-Wilms

    Many taxpayers who are claiming large refunds for CTC and EITC are still waiting for their refunds because of staffing shortages and closed IRS agencies. Ditto paper returns.

    My clients are still waiting for their “reactivated” ITIN numbers, permitting them their refunds and the ability to file a state return. The solution to the CTC/EITC delay is to issue the requested refunds and ask questions later (i.e., photocopies of SSN cards for the children and evidence of their presence in the USA plus six months in the T/Ps home or either an 8332 or a court decision).

    The ITIN is a no-brainer: extend the period in which the ITIN numbers remain in force until at least Tax Year 2020 and return original documents (usually passports).

    I believe issues might have an impact on IRS statistical data.

    Two more thoughts — I wonder what impact, if any, the President’s unwillingness to reveal tax return info might be having on this filing season. And be reminded that the elderly have been targetted by the coronavirus and maybe having their tax return filed by surviving relatives.

  2. Philip Steers

    The significant increase in the standard deduction may have set up a lot of people who don;t need to file.