Unclaimed Tax Refund: Here Are Possible Reasons Why Yours Is Delayed!

IRS Starts Sending Tax Refunds; Here's How To Track Yours! — Now that the IRS has confirmed whether state refunds are taxable, most Americans may file their taxes early and collect any anticipated tax refunds quickly. MOHAMMED HUWAIS/ Getty Images

Certain individuals are exempted from filing annual tax returns. Singles with gross income under $12,550, for example, do not have to file their 2021 tax return this year, and retirees with no taxable retirement income do not have to file their 2021 tax return this year.

Even if you're part of an organization that isn't required to file a tax return, it's usually in your best interest to do so. Simply said, persons in lower-income bands are more likely to qualify for important tax credits, which might result in a large tax return. Indeed, the IRS just announced that individuals are due $1.5 billion in unclaimed tax refunds for the 2018 tax year, and the time to claim them is rapidly approaching, according to Fox Business.

If it's been more than three weeks after you submitted your tax return online and you still haven't received your tax refund, there's most certainly a problem. If there are no problems, tax refunds are usually received within 21 days.

The IRS notified on March 23 that certain returns may take longer than expected, and highlighted several typical circumstances that might cause your tax refund to be delayed. The following are some of the most prevalent reasons for IRS payment delays this year, CNET reported.

1. Errors or Incomplete in Tax Return Details

It's critical to double-check any information you've put on your tax return to ensure it's correct. Before you submit your taxes to the IRS, simply take a second look to fix any potential errors and make sure you've filled out each field.

Also, double check that the amount on Letter 6419 matches what you received last year if you received child tax credit payments. If you provide an inaccurate amount, the IRS will need to check your tax return again, which will cause an "extensive delay," according to the IRS.

2. Tax Filer Owes Money From The IRS

If you owe money to the IRS, the government may remove a portion or all of your refund to settle the debt. If your refund is higher than what you owe, you'll get the difference by direct deposit or mail, albeit it may take some time.

A CP49 notification should be mailed to taxpayers whose refunds are utilized by the IRS to fulfill current payment commitments. Even if you don't owe the IRS any money, the agency has the right to retain your tax refund if you owe other state or federal authorities money.

The IRS can use all or part of your tax refund to cover obligations like child support, state taxes, or unemployment compensation repayments under the Treasury Offset Program. Such debts may cause your remaining tax refund to be delayed or lost entirely.

3. Improper Filing of Stimulus Payments

Most Americans will get a third stimulus check payment in 2021 as a result of the COVID-19 pandemic. While that money isn't taxable, if you're claiming the recovery rebate credit, you'll need to reconcile it on your tax return.

When taxpayers failed to correctly reconcile their stimulus payments with the amounts recorded for their recovery rebate credits, IRS Commissioner Charles P. Retting recently testified before the House Ways and Means Committee that the IRS received much more than 10 million returns in 2020. These returns need a human review, which causes significant delays.

Learn how to avoid this problem by utilizing IRS Letter 6475 or your online IRS account if you want to claim the recovery rebate credit on your tax return.

4. The IRS Suspects Identity Theft

If the IRS believes a tax return is being used to commit identity theft, your refund will be frozen until your identity is verified. You'll most likely receive a 5071C letter with advice on how to establish your identity if this happens. If your tax return is genuine, don't be frightened; an IRS letter does not indicate evidence of identity theft, merely a suspicion.

Taxpayers can confirm their identification by visiting the IRS website, which presently requires the creation of an ID.me account, or by dialing a special phone number indicated on the IRS letter. If those options don't work, you'll have to visit an IRS office in person.

Do You Expect $2,000 or More in Tax Refund?

April rains down cash as much as rain for millions of taxpayers because of the large tax refund checks that individuals around the country look forward to receiving each year.

In 2022, there's a lot to look forward to. More than one-fourth of customers (28%) estimate a return of $2,000 or more. With petrol prices at all-time highs and inflation forcing everyone to dig deeper for just about everything, that's a hefty chunk of cash.

Americans have traditionally disliked paying taxes, but they enjoy the benefits of overpaying - which is precisely what a refund is. The IRS is repaying you for money it never asked for, and the reason you inadvertently loaned it to them is that your company withheld too much money from your paycheck on your behalf last year, as per Go Banking Rates.