Can you sue the IRS for taking too long? It’s a question many taxpayers ask, especially when facing financial stress and the IRS seems to be moving at a snail’s pace. Dealing with IRS appeals can be a stressful experience. Between audits, notices, and trying to understand complex tax codes, waiting for a resolution or a refund can feel like an eternity.
This can be incredibly frustrating, particularly when a delayed refund is holding you back. You might be thinking, “The IRS has had my money for months. Is there anything I can do?” So, can you sue the IRS for taking too long?
Understanding the IRS Timeline: When Delays Happen
The IRS processes millions of tax returns each year. The processing time can fluctuate based on various factors, such as the complexity of your return, the filing method (electronically versus paper), and the potential for additional tax liability. Although the IRS strives to process returns and issue refunds quickly, this isn’t always the case.
Factors That Cause Delays
Several things can cause those frustrating IRS processing delays. Sometimes, these holdups relate to specific forms, common errors, or just plain old high volume. Here are some of the typical culprits:
Errors in Tax Returns
Errors on tax returns, such as incorrect Social Security numbers or miscalculations, require manual review and correction. These mistakes can lead to processing delays as the IRS must take the time to investigate and rectify inaccuracies.
Returns Claiming Certain Credits
Returns claiming certain credits like the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC) may require extra processing time as mandated by the Protecting Americans from Tax Hikes (PATH) Act. The IRS must adhere to specific requirements for processing returns claiming these credits, which can result in delays.
Incomplete Returns
Incomplete returns missing necessary forms or schedules can significantly delay the processing of your tax return. Ensuring that all required information is included in your return is essential for timely processing by the IRS.
Returns Flagged for Identity Theft or Fraud
Returns flagged for potential identity theft or fraud naturally require a more rigorous review by the IRS. The verification process for these returns is more extensive, leading to delays in processing while the IRS verifies the taxpayer’s identity and the accuracy of the return.
High Volume of Returns
During peak filing seasons, the IRS may experience a high volume of tax returns, leading to delays in processing. The increased workload can result in IRS employees working overtime to process the influx of returns, causing delays in processing times for all taxpayers.
What happens if the IRS takes more than 21 days to process?
Don’t panic just yet. Those 21 days are a guideline. Factors like errors, audits, and even just plain volume can lengthen things. If you haven’t received a response within a reasonable time, consider reaching out to the IRS or using their online resources to inquire about your specific case.
You can also talk to a tax professional about tax delays. Creative Tax Solutions offers comprehensive tax solutions to solve all your tax needs. Get experienced advice from tax specialists today.
IRS Processing Timeframes
Wondering how long you really have to wait? The IRS has specific guidelines about the length of time they are allowed for processing. These timeframes can vary depending on how you filed and if you made any changes.
- Electronically filed returns: Within 21 days.
- Paper filed returns: 6 to 8 weeks.
- Amended returns: Up to 16 weeks.
Can You Sue the IRS for Taking Too Long?
While the frustration of endless waiting is understandable, suing the IRS isn’t always a straightforward or successful path. This doesn’t mean legal recourse isn’t available. It simply means directly suing the IRS for taking too long to process a tax return, especially for a refund, usually isn’t a winning strategy. So, can you sue the IRS for taking too long?
The United States government, including its agencies like the IRS, generally enjoys “sovereign immunity.” This means you can’t sue the IRS in the same way you might sue an individual or a company unless the government consents to the lawsuit.
Although you can’t directly sue for the delay, you may have other legal options if the delay is unreasonable and causes you financial harm. Pursuing a refund suit against the IRS may be an option if other avenues have been exhausted.
When You Can Sue the IRS
Even though you might not win a lawsuit because of simple delays, the law provides situations when you can sue the IRS. Creative Tax Solutions helps taxpayers resolve tax problems. If any of the situations below apply, a lawsuit, after going through the proper channels, could be an option for you:
The IRS Denies a Legitimate Tax Refund Claim
If the IRS denies a legitimate tax refund claim despite exhausting administrative appeals with the IRS, you may have grounds to file a lawsuit in either the United States District Court or the United States Court of Federal Claims. Explore all options, including seeking assistance from tax professionals before considering legal action.
Disagreement with a “Notice of Proposing Additional Tax”
Upon receiving a “Notice of Proposing Additional Tax” (also known as a statutory notice or Notice of Deficiency) and disagreeing with it, you have the option to file a formal challenge, known as a “petition,” within 90 days (or 150 days for those residing abroad).
This petition can be filed in the Tax Court or specific federal district courts after attempting administrative appeals with the IRS.
Wrongful Seizure of Property by the IRS
If the IRS wrongfully seizes property (including garnishing wages), you can take legal action if you can prove that the IRS’s actions were reckless, intentional, or negligent. Such cases often involve serious allegations and typically require legal representation to navigate the complexities of federal court proceedings.
Understanding Statute of Limitations: Act Promptly
Tax law operates under strict timelines. A “statute of limitations” dictates the period during which you are legally permitted to pursue specific actions. There are specific deadlines for filing a lawsuit.
For instance, if you are considering appealing an IRS decision to the Tax Court, make sure to file your petition within the 90-day (or 150-day) timeframe. Missing these deadlines can result in a loss of your rights to challenge the IRS’s determination. You only have a certain window to file. This often depends on the specifics of your situation, like when the IRS denies your refund claim.
Navigating IRS Delays: Practical Steps To Take
Before jumping into legal action, try some more practical approaches for navigating those IRS delays and potentially resolving things faster. Communication is key. Keep records of all correspondence, including the date, time, and the names of any IRS employees you speak with.
Utilize Online Resources
The IRS offers valuable online resources that taxpayers can utilize to stay informed and manage their tax matters more effectively. The “Where’s My Refund” tool on the IRS website allows you to track the status of your tax refund, providing personalized information to help you understand where your refund stands.
The Taxpayer Advocate Service (TAS) website offers assistance to taxpayers facing challenges with the IRS, providing guidance and support in navigating complex tax issues.
Verify Refund Status
Verify the status of your refund using the “Where’s My Refund?” tool to stay informed about any potential delays or issues with your refund processing. Checking for errors in your tax return, such as ensuring the correct filing status and accurately reporting all income, can help identify common issues that may cause processing delays and address them promptly.
Respond Promptly
Responding promptly to any communication from the IRS, such as notices or requests for additional documentation, is critical in preventing further delays in the resolution of your tax matters.
Demonstrating your willingness to cooperate and provide the necessary information can help facilitate a smoother process and potentially expedite the resolution of any outstanding issues.
Document Preservation
Keeping detailed copies of all correspondence, tax return forms, payment receipts, and communications with the IRS is essential for maintaining a comprehensive record of your interactions. These documents serve as evidence of your efforts to address the delays and can be invaluable if you need to escalate the matter or seek assistance from higher authorities.
Seek Assistance from Taxpayer Advocate Service (TAS)
In cases where significant hardships arise due to prolonged IRS processing delays, seeking help from the Taxpayer Advocate Service (TAS) can provide additional support and guidance. The TAS can assist taxpayers facing challenges with the IRS and help navigate complex tax issues when traditional channels have not yielded successful outcomes.
How can I Talk to a Real Person at the IRS?
To talk to a real person at the IRS, you can contact your local IRS office to make an appointment and get in-person help with your tax issues. You can also reach out to the IRS by phone at 1-800-829-1040 for individual returns and 1-800-829-4933 for business returns.
The IRS offers assistance in multiple languages, so language barriers should not prevent you from seeking help.
Consult with a Tax Professional
So, can you sue the IRS for taking too long? While dealing with IRS delays is beyond aggravating, suing them for taking too long should usually be a last resort. This is especially true since the circumstances surrounding directly suing for processing time usually don’t meet the strict requirements for bypassing governmental immunity.
If you suspect something is amiss with your return, checking for errors, responding quickly to notices, or even contacting the Taxpayer Advocate might get you on track faster. Remember, stay informed and organized. Keep all your documents handy, including copies of returns and IRS correspondence, so you’re prepared in case things go sideways.
If legal action becomes necessary, consulting with an experienced attorney specializing in tax litigation will be beneficial. This way, you’re ensuring all those tricky legal processes are handled correctly and promptly.
Reach out to us at Creative Tax Solutions for expert guidance and assistance in navigating IRS delays. Our experienced team is dedicated to providing you with the support and resources you need to address your tax issues effectively and efficiently. Contact us today for a free consultation at 877-707-5151.
