Reminder: IRS Warns of Significant Claim Processing Delays In 2022

The Internal Revenue Service is warning taxpayers to expect significant delays in the processing of tax returns during 2022 according to a new report to Congress by the IRS’s Taxpayer Advocate.

The warning applies to all filings, including those related to federal motor fuel excise tax (FET) and biodiesel blender claims.

Energy marketers have been plagued by processing delays over the past 2 years. The excessive delays have forced marketers to float hundreds of thousands of dollars in refunds owed to them for biodiesel blending and the tax-free sale of clear diesel fuel to state and local governments and non-profit educational organizations.

Ordinarily, these claims are paid within 45 days. Many marketers rely on these refunds to pay for daily operational expenses. IRS claim processing delays have extended payment of refunds out 9 months and longer for many marketers.

The IRS cites a number of reasons for the processing delays including funding reductions, promulgating an array of new COVID related tax credits and stimulus payments, employee resignations and absences, and last but not least, the filing of paper claim forms.

Many marketers are still submitting their FET and biodiesel blender credit claims on paper forms.

Paper claim forms are like “kryptonite” to the IRS according to the report because they must be processed manually, a laborious task made worse due to lack of adequate resources.

Accordingly, the IRS is urging taxpayers to file all claims electronically. Electronic filing is often seamless and results in far fewer processing delays.

Click Here for a Q/A on electronic filing.

TAP HERE for all articles in January 31 EXPRESS Update