The Cocktail Effect
Since I make a living preparing taxes, I hope that I am pretty knowledgeable about the tax code. Whether it is a party or even a locker room, I hear some fantastic tax stories. Some say their tax professional is the greatest in the world because they do this while others say that theirs is terrible because there aren’t getting a refund. Naturally, everyone always asks me for my opinion. No matter the story, I tell them I would be happy to talk to them about it in the proper setting so I can learn all the details. Although there are some common tax situations, there are also many that are quite unusual. Because of these though, some strange things may happen. Without knowing all the details, I can’t possible pass judgment on another tax professional. Just because someone else is getting such a benefit, you for whatever reason may not.
Again, don’t be afraid to ask your tax professional why you aren’t eligible for this credit. If they can’t explain it, perhaps you need to find, again, another tax professional. If they can and the answer seems reasonable, perhaps the other person has a unique situation that does not apply to you. The tax code is 77,000 pages so there, literally, a myriad of reasons why. Furthermore, some tax professionals do some strange things. And just because it wasn’t caught immediately by the IRS doesn’t mean it is legit.
THE IRS PROCESS
The IRS receives, literally, millions of returns. Consequently, humans do not look at them; they are processed by computers. Unless there is an obvious error like wrong Social Security number or the withholding doesn’t match their electronic records, you will receive your refund long before the return is processed. If it is filed electronically, it should be between 8 and 21 days. If you have to mail it in, it will take four to six weeks. Amendments are even longer as they may take two to three months.
A few weeks to months after being filed, the IRS computers will start to look at your return again. They will see if there are errors or issues. These however will be slightly more complicated but usually pretty simple mistakes such as math errors or omitted information. If they find anything, they will send a letter. This letter, may technically, be an audit letter but usually nothing to stress. However, such letters have caused plenty of individuals countless sleepless nights.
It will take anywhere from one to two years before you returns get a real look. Again, not done by a human but a secondary algorithmic process. This is when the IRS will notice real issues and generate audit letters.
In short, it may be two years before the IRS notices something.
Brian Lang is enrolled to represent clients before the IRS and thus can help you with any of your tax needs, you can email him at email@example.com if you have any further questions.