Key Takeaways | Still Waiting on Your IRS Refund? What to Do Next

During the fifth webinar in our Tax Controversy Webinar Series, Shawn O’Brien and Susan Ryba of our Tax Controversy & Litigation Group discussed the IRS refund process, common causes of delayed payment, and practical strategies taxpayers can use to accelerate payment of outstanding refunds.

Top takeaways included:

1. Refund claims must be carefully drafted to preserve rights and avoid delays.
   A valid claim must clearly state legal grounds and supporting facts for each tax type and period, and vague or incomplete claims can limit arguments later and slow IRS review, making it critical to be thorough and over inclusive at the outset.
2. The IRS refund process is complex, multi-step, and prone to delays.
   After filing, claims move through review, potential audit, approval, and sometimes Joint Committee review before payment is issued, and delays often occur at transition points between these stages rather than due to the merits of the claim itself.
3. Most refund delays are administrative, not substantive.
   Common issues include claims not being entered or assigned, audits moving slowly due to resource constraints, internal IRS hold policies, Joint Committee backlog, or approved refunds not being processed for payment.
4. IRS account transcripts are the most important diagnostic tool.
   The transcript is the IRS’s official record of activity on a taxpayer’s account and should be used to confirm whether a claim was received, processed, or scheduled for payment, and if the claim is not reflected on the transcript, it may not exist from the IRS’s perspective.
5. Proactive management significantly improves outcomes.
   Taxpayers who actively monitor their claims, follow up regularly, and engage with IRS personnel are far more likely to see progress, as visibility and persistence often drive prioritization within the IRS.
6. Audits of refund claims can be accelerated with strategic engagement.
   Delays during examination often stem from lack of clarity or resource constraints, and providing clear explanations, anticipating IRS questions, and supplementing the record can help move audits toward resolution more efficiently.
7. Large refunds face additional scrutiny through Joint Committee review.
   Refunds exceeding $5 million for C corporations or $2 million for other taxpayers require Joint Committee approval, which can create additional delays, and proactively assisting with the submission and addressing potential questions can help streamline this process.
8. Approval does not guarantee payment, final processing is a common failure point.
   Even after all approvals, refunds may stall if they are not properly scheduled for payment, making it essential to confirm payment status through transcripts and follow up with the appropriate IRS contacts.
9. Escalation tools are available but may have limitations.
   Options such as the Taxpayer Advocate Service or congressional inquiries can help advance stalled claims, although resource constraints within the IRS may limit their speed and effectiveness.
10. Refund litigation is a powerful tool to force action.
    Taxpayers always have the option to file suit after six months of IRS inaction or following a denial, and litigation introduces judicial timelines and often prompts faster resolution, particularly in cases stalled by administrative inaction, though it requires comfort with public proceedings.
11. Refunds should be viewed as a process, not a one time event.
    From filing through payment, successful outcomes depend on continuous monitoring, strong documentation, and strategic escalation when necessary.

Access to the webinar replay is available upon request. Get in touch to learn more.

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