Mentor RIA Consulting
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|Posted on January 15, 2021 at 10:48 AM|
The tax season this year – 2020 taxes filed in 2021 – will be unlike recent years for many reasons. One major change is the almost certain delays you may expect in connection with the preparation and filing of your taxes. The potential for delay is based on several factors, most of which will be out of your control but which you may want to understand and allow for this year.
First, we have the substantial backlog at the IRS for 2019 returns that have NOT yet been processed. Between individual returns and business returns, over ten million are outstanding. This could not only affect the taxpayers whose returns haven’t been addressed but also contribute to a delay for many of the rest of us.
In a good year, many filings are delayed by late arriving K-1s and 1099s, a problem mainly attributable to the slowness of individuals, businesses and other entities to gather the information and prepare the required forms. Naturally, this is less of an issue where the forms are delivered to the taxpayer electronically but there is always a wait for them to be prepared. This year, the second factor relates directly to these required forms most of us need to prepare our returns. The factor, much more troubling than the IRS backlog, is the abject failure of the USPS to handle first class mail expeditiously, particularly in recent months.
In the last two months, we have seen or have heard from credible sources that first class mail often has been arriving two weeks or more (and as much as five weeks) AFTER the mailing date as indicated by the cancellation of the postage. There is nothing first class about this treatment and it erodes trust in the postal service. If you , like many of us, typically receive some tax documents in the mail, be prepared to wait indefinitely for it to arrive.
Please note, however, that some first class mail seems to be arriving within a week of its mailing and so is not nearly as problematic. The inconsistency in treatment and the lack of any meaningful explanation are reminders to stay alert and know when something should be arriving and be prepared to take action when it does not.