In the year 2025, a complex scenario is observed in the processing of tax refunds for millions of Americans. Tax authorities manage declarations that are essential for working families, who use credits such as the popular EITC and ACTC to satisfy essential needs. The process depends on multiple variables and established regulatory procedures.
Several factors can contribute to delays in issuing refunds. Errors in the declaration, such as incorrect numbers or missing forms, as well as additional reviews to prevent credit fraud, lengthen the process. The accumulation of declarations during the high season increases institutional response times significantly.
Why some tax refunds are arriving late this year
Among the general reasons cited by the IRS are notifications such as CP21-A, which grants 60 days to correct errors. Verifications on credits such as EITC and ACTC are intensified to prevent identity theft, affecting those declarations that require a detailed evaluation by the tax agency.
The process is impacted when there are debts with the IRS or other agencies, since outstanding amounts are compensated through the Treasury Compensation Program. Likewise, suspicion of identity theft, identified with Letter 5071C, imposes a verification protocol that can prolong the wait for reimbursement in each particular case.
DOGE is reducing IRS staff: Will this cause delays?
In the year 2025, and with the arrival of Donald Trump and his “secretary” of the Department of Government Efficiency (DOGE), Elon Musk, dozens of thousands of federal employees were ordered to be cut, causing a stir in government agencies and delays in paperwork and procedures.
Hiring cuts, initiated by White House decisions, affect return processing. Reports from various media indicate that up to 90,000 agents could be reassigned or laid off, which reduces the operational capacity of the tax agency in tax season.
Also cited as a reason for the delays is the $40 billion cut to IRS services. It is one of the largest budget adjustments in American history, and these cuts include, of course, the staff reduction we mentioned earlier.
Commissioner Danny Werfel’s resignation on January 20, 2025 contributes to organizational instability. Reader comments, such as Yvette’s on February 17, have noted the impact of layoffs during tax season, increasing pressure on the return review and processing system in a context of reduced resources.
Other factors include filing returns with expired or soon-to-expire ITINs. Although the IRS accepts these cases, lack of staff can increase delays. Likewise, the policies for the ACTC credit prevent the issuance of refunds before mid-February, affecting the total refund when said benefit is claimed.
