No more pointing to a calendar or a chart to show taxpayers when to expect their tax refund.

The beloved Refund Cycle Chart has been retired by the IRS.  What?!  Yes, it’s true.  Taking its place is a new and, we hope, improved “Where’s My Refund?” (WMR) application, which gives taxpayers the ability to track their refunds online.  We can use computers and smartphones to track Santa Claus around the globe on Christmas Eve, so it is only logical that we should be able to track our refunds in the same manner, right?  Especially since that refund helps a lot of us recover from the damage caused by that jolly old elf.
A big priority for the IRS has been to improve refund status communications, and the timing could not be better.  Last year, a couple of untimely IRS processing “hiccups,” combined with insufficient messaging from the WMR genie, created a lot of confusion for taxpayers* and as you would expect, the confusion led to frustration.  Taxpayers weren’t asking “Where’s My Refund?” anymore; it was more like, “Where in the…” Well, you get the point.  It got dicey.

Sometimes, a bad situation becomes the catalyst for positive change.  The new WMF application promises to be one giant leap for mankind, or at least one giant leap for the American taxpayer.  Rather than estimating the deposit cycle based on what day the return is filed, the new application actually tracks the refund and provides simple messaging based on the three steps of the refund process:

1.    Return received
2.    Refund approved
3.    Refund sent

Here’s how it is expected to work:

The tool will declare the status “Return received” within 24 hours of the tax return’s acceptance if e-filed, or four weeks after mailing a paper return.  WMR will update the status to “Refund approved” once the return passes all validation checks, and will provide a personalized refund date that will not change.  Once the refund is sent, the status will be updated to “Refund sent,” the last step of the process.  At no time will WMR provide an “estimated” refund date.

If the return processes smoothly, it is pretty straightforward.  But what happens when the return gets flagged for review?  The IRS will produce an in-your-face “Take Action” warning message in the WMR tracker any time the taxpayer needs to, well, take action.  Not only that, but WMR will also communicate to the taxpayer if his or her return was modified, and provide details explaining why.  The IRS seems to have covered all bases.

In addition to the WMR tracker, the IRS has a new standard reply for taxpayers asking when they can expect their refund: “More than 9 out of 10 tax refunds are issued in less than 21 days,” which is another way of saying, “We are not estimating refund dates anymore, but chances are good that you will receive your refund in three weeks or less.”

All jokes aside, the combination of consistent messaging and a personalized refund tracker is a step in the right direction. It gets the IRS out of the business of guesstimating when refunds will be processed, and, if WMR works as expected, it should mean fewer calls from anxious taxpayers asking… Well, you get the point.

Summary:

• The new WMR refund tracker is one giant leap for the IRS and the American taxpayer.
• To access the new WMR refund tracker, taxpayers can either:
  •    Go to irs.gov/refunds
  •    Install the IRS2Go smartphone application.
• Taxpayers should be prepared to enter their Social Security Number (SSN), filing status, and refund amount when accessing their WMR account.
• Unless WMR says, “Take Action,” don’t.

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* Early in the 2012 filing season, the IRS had some over-zealous fraud detection systems in place, and about six million returns were sidelined in error.  We shouldn’t be too critical of the IRS for this. Protecting 140 million taxpayers from a huge surge in identity theft, in addition to staving off crafty fraudsters from siphoning millions of dollars from our government (OUR money), is no easy task.  Unfortunately, in the same approximate time-frame, the IRS’s new Modernized e-File system experienced a “downstream” file-moving issue, delaying approximately 7.8 million returns from being processed.  The problem really snowballed when the Where’s My Refund genie and IRS call centers got overwhelmed by taxpayer inquiries and neither was equipped to provide sufficient answers.

Posted by J Stork