Perhaps lost in the clamor of setting up employees to work remotely at the outset of the coronavirus pandemic was the fact that the deadline to file federal income tax returns was delayed from April 15 to July 15. What should not be lost on anyone is that July 15 is just two days away.
April and May were likely very good months for collection agencies across the country, thanks to forbearance agreements on many different types of loans and stimulus checks that provided a one-time windfall for individuals, many of whom used the money to pay off old bills.
Delaying tax day for three months also presents another opportunity for companies in the credit and collection industry to extend the positive results they have seen for the past few months. Beyond tax day, a period such as this may not present itself again for quite a while. The country is still watching the number of individuals who have tested positive for COVID-19 increase in a growing number of states and more governors are re-instituting restrictions aimed at curbing the virus’s spread. The unemployment rate could remain at historically high rates for a long time to come and many expect it to get worse before it starts getting better.
Asking about whether an income tax refund is on the way may be the last shot that collection agencies have at recovering anything for the next few months.
Through July 3, the number of returns that had been received by the IRS was 2% lower than through the same point of 2019, according to the tax agency. The number of returns that had been processed, however, was 9.5% lower, resulting in about 12 million returns that have been filed, but not yet processed. The average refund was $2,762, down slightly from $2,737 a year ago.
July 15 is also the day that private collection agencies can begin recovering unpaid debts owed to the Internal Revenue Service.