Tax Guru – Ker$tetter Letter

Helping real people win the tax game.

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Archive for February, 2022

Funky Instrumental Version of “TaxMan”

Posted by taxguru on February 23, 2022

Although first released in 1966 by The Beatles, George Harrison’s song is still very timely and popular.

Thanks to the Ultimate Classic Rock website for this.

This has been added to my YouTube playlist of TaxMan covers.

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Inflation Hits IRS

Posted by taxguru on February 23, 2022

Every three months, IRS looks at the current inflation rate and determines how much interest they will be charging taxpayers on late tax payments and paying out to taxpayers for delayed refunds. For the past seven quarters – since July 1, 2020 – it has been three percent (3.0%) APR. It’s not per day. It’s an annual rate.

As we all know, inflation is currently at its highest pace since Jimmy Carter’s reign. IRS has just announced in this press release that, as of April 1, their main interest rate will be a whopping four percent (4.0%) APR.

As I remind clients who are upset about the IRS’s lengthy delays in sending out refunds, their money will be earning a much higher return from IRS that it would in a bank, where they are still paying less than one percent on savings accounts. It’s the silver lining to a bad situation.

Three months from now, I expect to be writing a similar post about IRS raising their interest rate again, to five or six percent.

Posted in inflation, interest, IRS | Comments Off on Inflation Hits IRS

Millions of Tax Returns Unprocessed by IRS

Posted by taxguru on February 19, 2022

Since almost all of our clients file their returns on extended due dates – normally October 15 – many of them are currently among the 23.7 million return backlog that IRS has admitted to.

Here is what I have had to send to a number of clients who are wondering why they haven’t received their refunds after more than four months.

“IRS is currently dealing with a backlog of almost 24 million 2020 and earlier year tax returns that need to be processed.  There has been a lot of press about this, such as this article.

Is the Massive IRS Backlog Impacting This Tax Season?

The latest news is that they have not processed any returns received after April 2021 and they are asking people not to send in extra copies because that will just make matters worse for them.

It’s a mess on several levels.  Many of us tax pros are hoping IRS delays this year’s Tax Day from April 18 until at least a few months later in order to give themselves time to get caught up with the prior year returns before they receive millions more 2021 returns.

I hope this helps you understand what’s going on.”

Posted in IRS | Comments Off on Millions of Tax Returns Unprocessed by IRS