If the process of filing your taxes this year has left you in a jam, you are not alone. From shutdown delays, tax law changes, and outrage over lower expected refunds affecting millions of Americans, confusion and frustration is at a peak as we head to the April 15 deadline.
National Taxpayer Advocate Nina Olson is your ear at the IRS—the Office of the Taxpayer Advocate is a government office dedicated to helping taxpayers solve their problems with the IRS. In her Annual Report to Congress, Olson highlighted 20 major problems with the IRS plaguing taxpayers this year. At the top of the list was the taxpayers’ ability to get answers to their tax law questions.
Texas
Average refund: $3,206
Number of refunds: 10,087,693
Total income tax refunded: $32.3 billion
Louisiana
Average refund: $3,115
Number of refunds: 1,611,412
Total income tax refunded: $5 billion
Connecticut
Average refund: $3,099
Number of refunds: 1,396,609
Total income tax refunded: $4.3 billion
Oklahoma
Average refund: $3,098
Number of refunds: 1,300,577
Total income tax refunded: $4 billion
New York
Average refund: $3,059
Number of refunds: 7,712,210
Total income tax refunded: $23.6 billion
New Jersey
Average refund: $3,013
Number of refunds: 3,479,321
Total income tax refunded: $10.5 billion
Wyoming
Average refund: $2,989
Number of refunds: 214,649
Total income tax refunded: $641.6 million
North Dakota
Average refund: $2,983
Number of refunds: 277,422
Total income tax refunded: $827.4 million
Florida
Average refund: $2,933
Number of refunds: 7,854,538
Total income tax refunded: $23 billion
Mississippi
Average refund: $2,922
Number of refunds: 1,018,429
Total income tax refunded: $2.97 billion
California
Average refund: $2,911
Number of refunds: 13,594,703
Total income tax refunded: $39.5 billion
Washington D.C.
Average refund: $2,900
Number of refunds: 277,399
Total income tax refunded: $804.5 million
Illinois
Average refund: $2,900
Number of refunds: 4,973,653
Total income tax refunded: $14.4 billion
Maryland
Average refund: $2,861
Number of refunds: 2,329,288
Total income tax refunded: $6.7 billion
Massachusetts
Average refund: $2,850
Number of refunds: 2,704,250
Total income tax refunded: $7.7 billion
Alaska
Average refund: $2,843
Number of refunds: 276,887
Total income tax refunded: $787 million
Nevada
Average refund: $2,830
Number of refunds: 1,111,952
Total income tax refunded: $3 billion
Georgia
Average refund: $2,832
Number of refunds: 3,606,774
Total income tax refunded: $10.2 billion
Alabama
Average refund: $2,802
Number of refunds: 1,650,125
Total income tax refunded: $4.6 billion
Virginia
Average refund: $2,771
Number of refunds: 3,129,030
Total income tax refunded: $8.7 billion
Arkansas
Average refund: $2,759
Number of refunds: 989,288
Total income tax refunded: $2.7 billion
Tennessee
Average refund: $2,726
Number of refunds: 2,465,816
Total income tax refunded: $6.7 billion
Utah
Average refund: $2,681
Number of refunds: 1,033,141
Total income tax refunded: $2.8 billion
Washington
Average refund: $2,681
Number of refunds: 2,749,362
Total income tax refunded: $7.4 billion
Arizona
Average refund: $2,672
Number of refunds: 2,244,925
Total income tax refunded: $6 billion
Kansas
Average refund: $2,665
Number of refunds: 1,044,275
Total income tax refunded: $2.8 billion
New Mexico
Average refund: $2,657
Number of refunds: 724,549
Total income tax refunded: $1.9 billion
South Dakota
Average refund: $2,651
Number of refunds: 321,372
Total income tax refunded: $852 million
West Virginia
Average refund: $2,649
Number of refunds: 649,049
Total income tax refunded: $1.7 billion
Kentucky
Average refund: $2,648
Number of refunds: 1,590,274
Total income tax refunded: $4.2 billion
Delaware
Average refund: $2,648
Number of refunds: 365,749
Total income tax refunded: $968.4 million
Rhode Island
Average refund: $2,643
Number of refunds: 436,490
Total income tax refunded: $1.1 billion
Pennsylvania
Average refund: $2,643
Number of refunds: 5,071,264
Total income tax refunded: $13.4 billion
Colorado
Average refund: $2,636
Number of refunds: 2,014,233
Total income tax refunded: $5.3 billion
North Carolina
Average refund: $2,629
Number of refunds: 3,580,471
Total income tax refunded: $9.4 billion
Nebraska
Average refund: $2,615
Number of refunds: 711,103
Total income tax refunded: $1.8 billion
Indiana
Average refund: $2,612
Number of refunds: 2,577,994
Total income tax refunded: $6.7 billion
Iowa
Average refund: $2,602
Number of refunds: 1,141,151
Total income tax refunded: $3 billion
New Hampshire
Average refund: $2,602
Number of refunds: 558,359
Total income tax refunded: $1.4 billion
Missouri
Average refund: $2,601
Number of refunds: 2,220,029
Total income tax refunded: $5.7 billion
South Carolina
Average refund: $2,569
Number of refunds: 1,719,299
Total income tax refunded: $4.4 billion
Hawaii
Average refund: $2,564
Number of refunds: 535,763
Total income tax refunded: $1.4 billion
Michigan
Average refund: $2,560
Number of refunds: 3,776,668
Total income tax refunded: $9.7 billion
Ohio
Average refund: $2,517
Number of refunds: 4,570,589
Total income tax refunded: $11.5 billion
Minnesota
Average refund: $2,516
Number of refunds: 2,112,212
Total income tax refunded: $5.3 billion
Idaho
Average refund: $2,457
Number of refunds: 561,133
Total income tax refunded: $1.4 billion
Wisconsin
Average refund: $2,436
Number of refunds: 2,236,886
Total income tax refunded: $5.4 billion
Montana
Average refund: $2,401
Number of refunds: 372,817
Total income tax refunded: $895 million
Oregon
Average refund: $2,398
Number of refunds: 1,431,924
Total income tax refunded: $3.4 billion
Vermont
Average refund: $2,392
Number of refunds: 254,192
Total income tax refunded: $608 million
Maine
Average refund: $2,336
Number of refunds: 509,896
Total income tax refunded: $1.2 billion
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“My staff would call in with basic questions, questions where the law hadn’t changed at all,” Olson says. But “we got very few right answers.”
Adding to the confusion and frustration is people’s inability to get in touch with a human being, Olson said. While the IRS reports an 86% level of service for callers, Olson says they found only a quarter of the calls are getting through to someone on the other end of the line.
“To me it’s a math problem, where you have to say to Congress, the IRS just needs more people,” Olson says. “We need more employees answering those calls.”
While the IRS is currently testing a new call-back feature, the agency’s antiquated IT systems are causing major headaches and need an overhaul, Olson says.
California
State income tax: 1% to 13.3%
Maine
State income tax: 5.8% to 10.15%
Oregon
State income tax: 5% to 9.9%
Minnesota
State income tax: 5.35% to 9.85%
Iowa
State income tax: 0.36% to 8.98%
New Jersey
State income tax: 1.4% to 8.97%
Vermont
State income tax: 3.55% to 8.95%
Washington, DC
State income tax: 4% to 8.95%
New York
State income tax: 4% to 8.82%
Hawaii
State income tax: 1.4% to 8.25%
Wisconsin
State income tax: 4% to 7.65%
Idaho
State income tax: 1.6% to 7.4%
South Carolina
State income tax: 0% to 7%
Connecticut
State income tax: 3% to 6.99%
Arkansas
State income tax: 0.9% to 6.9%
Montana
State income tax: 1% to 6.9%
Nebraska
State income tax: 2.46% to 6.84%
Delaware
State income tax: 2.2% to 6.6%
West Virginia
State income tax: 3% to 6.5%
Georgia
State income tax: 1% to 6%
Kentucky
State income tax: 2% to 6%
Louisiana
State income tax: 2% to 6%
Missouri
State income tax: 1.5% to 6%
Rhode Island
State income tax: 3.75% to 5.99%
Maryland
State income tax: 2% to 5.75%
North Carolina
State income tax: 5.75%
Virginia
State income tax: 2% to 5.75%
Oklahoma
State income tax: 0.5% to 5.25%
Massachusetts
State income tax: 5.1%
Alabama
State income tax: 2% to 5%
Mississippi
State income tax: 3% to 5%
Utah
State income tax: 5%
Ohio
State income tax: 0.495% to 4.997%
New Mexico
State income tax: 1.7% to 4.9%
Colorado
State income tax: 4.63%
Kansas
State income tax: 2.7% to 4.6%
Arizona
State income tax: 2.59% to 4.54%
Michigan
State income tax: 4.25%
Illinois
State income tax: 3.75%
Indiana
State income tax: 3.3%
Pennsylvania
State income tax: 3.07%
North Dakota
State income tax: 1.1% to 2.9%
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“The IRS has two core systems but they were designed in the 1960s [and] are the oldest databases in the federal government,” Olson says. Taxpayer information is stored on 60 different IT programs as newer systems are updated. This causes a tremendous amount of confusion for the IRS and taxpayers, Olson says.
“You’ll call the IRS and say, ‘I sent you a payment,’ and they’ll say, ‘We can see that you sent us something but the payment isn’t showing up yet,’” Olson says. “You see that confusion and it creates work for the IRS, and we can’t keep going like that.”
Because taxpayer information is stored in so many different places, there is a concern of hacking and identity theft. Olson says the IRS fields millions of hack attempts per day, and while its security systems are good, ID theft is rampant and more difficult to monitor, she says.
“Where there are risks for taxpayers is that an identity thief can appear almost identical to the taxpayer—they can prepare a return that looks identical to a legitimate return and how is [the IRS] supposed to know?” Olson says. “The IRS has tried to work very hard with preparers and payroll companies to really be careful about not falling for these scams.”
Additionally, scammers are posing as IRS agents, and calling taxpayers, saying if they don’t pay immediately, they’ll be sent to jail. If you get one of these calls, don’t fall for it, however rattling it may be.
“The IRS doesn’t call you up and say we’re going to put you in jail,” Olson says. “It’s rare we would be calling someone and it would always be preceded by letters and appointments first, so don’t fall for that.”
If you have a tax question, tune in Thursday for a Yahoo FInance Live Tax QA. A panel of experts will be answering your questions, starting at 11:30 AM ET on yahoofinance.com and Facebook.
According to the Internal Revenue Service, 20-25% of all Americans wait until the last two weeks before the deadline to prepare their tax returns. At that late date, there are only two things you can do: File your taxes pronto, or request a tax extension.
Don’t overpay taxes by overlooking these tax deductions. See the 10 most common deductions taxpayers miss on their tax returns so you can keep more money in your pocket.
Finding a good CPA for your taxes is simple with these seven tips: 1. Ask about their specialization; 2. Verify their identification number, 3. Look up their license, 4. Consider their experience, 5. Confirm their willingness to sign, 6. Ask for advice, and 7. Determine their fees.
Most tax returns today are processed within three weeks, with many filers receiving their refunds even sooner. Simple errors or oversights can lead to a delay of your tax refund.
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