Why is my refund delayed this year?

Approximately 2-3% of the returns I file each year experience a significant delay in the issuing of refunds. It’s certainly not typical, but it’s also not uncommon, and isn’t cause for concern other than the obvious inconvenience of having to wait longer than expected for your refund(s) to be issued.

The IRS and Oregon do not provide any explanation for refund delays, and are not required to do so. Nor will they provide any explicit notification when your return has been fully processed and the refunds issued. The refunds will simply show up, announced, as a deposit into your bank account.

For very valid reasons, the IRS and Oregon are not particularly open about their internal processes. So I’m left to speculate as to what the source of the delays could be. Some possibilities:

  • One of your employers may have been significantly late in providing W-2 information to the IRS or Oregon.
  • One of your employers may have unreconciled payroll discrepancies that have yet to be resolved with the IRS or Oregon.
  • The IRS or Oregon may be automatically flagging any tax return claiming a particular tax credit over a particular dollar amount, and requiring an actual, human being to quickly review those returns before issuing refunds.
  • The IRS receives millions of attempts each year at unauthorized use of SSNs and EINs to file fraudulent tax returns. It’s possible that your SSN or EIN was flagged due to attempted fraudulent return filing, requiring further review. (This does not mean that you’re a victim of identity theft, in the usual sense.)

I will stress that a refund delay is not indicative of an audit! Nor does it indicate that anything about your tax return was incorrect, or improperly filed.

You will receive a notice in the mail from the IRS or Oregon if there’s anything about your return that requires additional attention on your (or my) part. This is not common! In almost all cases, the refunds will be issued, with no explanation for the delay.

So, the bottom line is: please be patient. It’s helpful (for me) if you let me know about the delay, but there’s nothing you or I can do to speed up the process. The most I can do is confirm with the IRS and Oregon that your return is still being processed.

 

(One more example: In 2017, several of my clients received notices from the IRS requiring that they verify their identity in person, at the Portland IRS office, before their refund could be issued. As it turned out, they all worked for the same employer. The employer had suffered a hack in 2016 resulting in the theft of sensitive employee information, and had notified the IRS of the hack.)

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