It’s normal to have a lot of questions about the tax return process, especially when you’re waiting for the IRS longer than expected.
There are a number of reasons for a tax return to be delayed, including errors, backlogs, and verification delays.
At Chaliff + Associates, small businesses come to us frequently with questions about their tax return process, including delays. Let’s take a look at some of the most common reasons why a business tax return may be delayed.
Currently, the IRS’s return rate is delayed because of a backlog of paper returns.
In 2022, the IRS processed more than 261 million tax returns and additional documents for the 2021 fiscal year. More than 90% of returns are filed electronically, but that still leaves 26 million returns submitted on paper.
These kinds of delays affect the entire system. Even though you likely filed an electronic return, delays in one area of the IRS can certainly impact others.
Mistakes made in the tax filing process can slow down the return process, especially if the IRS is already running behind.
A delay in your return is sometimes– but certainly not always– a sign of an impending audit.
Audits can be stressful, but if this is the cause for your delay, then there is nothing to do but wait until you receive instructions from the IRS.
Detailed and accurate bookkeeping is your best strategy to both avoid an audit and ensure a smooth auditing process if it is ordered.
According to the nonprofit Tax Foundation, the IRS is required to process business tax returns within 90 days. But since 2020, the timeframe has been significantly longer. In November 2021, the average timeframe for processing a return was 166 days.
Because of these widespread delays, you shouldn’t be too worried just because your return is still labeled as being processed.
By providing these services, business managers can focus on growing their businesses instead of worrying about taxes, bookkeeping, and records management!
Related: How To Find The Right Tax Advisor For Your Small Business
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