Navigating the complexities of estate settlement is challenging enough, yet many individuals face prolonged waits for tax refunds after the passing of a loved one, recent findings indicate. Data reveals a significant delay in processing refunds owed to beneficiaries of deceased taxpayers, extending the financial strain during an already difficult period. This issue has prompted scrutiny and efforts toward improvement from tax authorities and advocacy groups.
Lengthy IRS Refund Delays for Deceased Taxpayers
From January 2021 through July 2024, the Internal Revenue Service (IRS) took an average of 444 calendar days to issue refunds due to beneficiaries of deceased individuals, according to a report released last year by the Treasury Inspector General for Tax Administration (TIGTA). This timeframe sharply contrasts with the typical 21-day refund processing period for most Americans who file electronically with direct deposit during regular tax season. Experts emphasize that these refunds are often crucial for covering estate-related expenses or supplementing inheritances.
As of July 2024, the IRS reported a substantial backlog of 440,443 cases involving refunds owed on deceased taxpayer accounts, totaling over $1.3 billion. A concerning portion of these refunds were significantly overdue, with 9% exceeding two years, 43% falling between one and two years, and 49% being up to a year old. These delays underscore a systemic issue impacting grieving families.
The Impact of Form 1310 and Manual Processing
The extended processing times are largely attributed to the requirements surrounding IRS Form 1310, which is necessary to claim a federal tax refund on behalf of a deceased taxpayer. This form is typically required unless a surviving spouse files a joint return or a court-confirmed personal representative is involved. According to TIGTA, submitting Form 1310 initiates a manual review process within the IRS, creating potential bottlenecks and prolonging refund issuance.
The National Taxpayer Advocate (NTA), an independent taxpayer ombudsman, acknowledged the hardship this creates, stating, “Losing a loved one is difficult and filing a final tax return should not cause undue burden in a difficult time.” The reliance on manual processing significantly contributes to the delays experienced by beneficiaries.
IRS Efforts to Reduce the Refund Backlog
Recognizing the issue, the IRS has undertaken initiatives to address the backlog and expedite refund processing. By August 2025, over 70% of the outstanding refunds had been cleared, leaving approximately 1,100 returns pending processing, as reported by the NTA. Furthermore, for the 2025 tax filings, the IRS implemented a program designed to minimize or eliminate the need for manual refund processing for claims involving deceased taxpayers.
These improvements include enabling systemic refunds once Form 1310 or any required documentation is received, prioritizing older cases for resolution, and enhancing employee training to efficiently handle returns related to deceased individuals. The goal is to streamline the process and provide timely financial relief to grieving families.
Proactive Steps for Estate Tax Return Efficiency
While improvements are being made at the IRS, individuals can take proactive steps to simplify the tax filing process for their estates. Financial professionals recommend maintaining meticulous records of all tax-related information, including account details and access instructions. Colleen Carcone, Director of Wealth Planning Strategies at TIAA, notes the increasing difficulty of accessing tax forms online, emphasizing the importance of organized documentation.
Experts also suggest consolidating bank and investment accounts to reduce the number of forms required and compiling a list of contacts – such as accountants or financial advisors – who can provide assistance. Tyler End, chief executive and co-founder of Retirable, highlights the value of professional guidance, stating, “It might be worth it to get a CPA… It's not an auto-tax filing.” Ultimately, careful planning and collaboration with qualified professionals can significantly ease the burden on beneficiaries during a sensitive time.
