IRS to commence tax season early, warns of potential hiccups due to pandemic and funding issues

Tax season will begin early this year and is already forecast to be an especially "frustrating" one, the Internal Revenue Service has warned, as pandemic-era tax changes and staffing limitations squeeze the nation's tax agency.

The IRS announced that it will begin accepting and processing 2021 tax year returns on Monday, Jan. 24. This date is more than two weeks earlier than the start of last year's tax season, which the IRS said will allow more time to ensure everything runs smoothly amid the ongoing pandemic and programming changes introduced over the past year, including the Child Tax Credit.

Meanwhile, the deadline to file or request an extension this year is April 18.

"Planning for the nation's filing season process is a massive undertaking, and IRS teams have been working non-stop these past several months to prepare," IRS Commissioner Chuck Rettig said in a statement.

"The pandemic continues to create challenges, but the IRS reminds people there are important steps they can take to help ensure their tax return and refund don't face processing delays," Rettig added.

Some of the steps Americans can take include filing electronically and receiving their refund via direct deposit, Rettig said, and he also urged those who received an Economic Impact Payment or advance Child Tax Credit last year to pay extra attention when filing to ensure all forms are accurate in order to avoid delays. The IRS said that people who received these tax credits for children or stimulus payments in 2021 will need the amounts of these payments when preparing their tax returns. The IRS is mailing letters to recipients and they can also check amounts received on the IRS website.

People can still file 2021 returns even if they are awaiting the processing of previous tax returns, the IRS added.

Finally, Rettig urged that filers "should make sure they report the correct amount on their tax return to avoid delays."

The tax agency encouraged people to seek out online resources (such as information available on IRS.gov) before calling the IRS, saying that as a result of pandemic-era tax changes and challenges, the IRS phone systems received more than 145 million calls between Jan. 1 and May 17 of last year -- representing over four times more calls than in an average year.

The IRS commissioner warned Americans to expect some snags or delays this year, saying the understaffed and underfunded agency is doing the best it can given the challenges of processing over 160 million individual tax returns.

"In many areas, we are unable to deliver the amount of service and enforcement that our taxpayers and tax system deserves and needs. This is frustrating for taxpayers, for IRS employees and for me," Rettig stated. "IRS employees want to do more, and we will continue in 2022 to do everything possible with the resources available to us. And we will continue to look for ways to improve. We want to deliver as much as possible while also protecting the health and safety of our employees and taxpayers. Additional resources are essential to helping our employees do more in 2022 -- and beyond."

Overall, the IRS said it anticipates most taxpayers will receive their refunds within 21 days of when they file electronically -- if they choose the direct deposit option and there are no issues with their return. The agency recommends against filing paper returns whenever possible to avoid delays and to get refunds faster, adding that the average refund last year was some $2,800.