I’ve heard from a number of readers frustrated with their inability to get their tax refunds or economic impact payments, with attempts to contact the IRS via phone only adding to their unhappiness.

According to Erin Collins, the national taxpayer advocate, in her midyear report to Congress, the IRS received 167 million calls during the 2021 filing season -- more than four times as many calls as occurred during 2019, the “last typical filing season.”

The advocate works for TAS, the Taxpayer Advocate Service (tinyurl.com/2pn2funa). TAS was created by the Taxpayer Bill of Rights 2 in 1996 as an independent organization within the IRS. TAS’s purpose is to help taxpayers when they have problems they can’t resolve with the IRS. However, even TAS said on its website in March (tinyurl.com/32e6v8ca) that its ability to help with delayed tax refunds is “limited.”

According to Collins’ report, the IRS had a “Level of Service” on its Accounts Management telephone lines of 15%, and only 7% of taxpayer calls reached a “telephone assistor.” The numbers were even worse on the most frequently called IRS toll-free number, the “1040” line. About 85 million calls were placed, and only 3% actually reached a telephone assistor. As Collins noted, when so few calls get through, “problems remain unsolved and taxpayer frustration mounts.”

Collins’ midyear report shared important information on a number of fronts. For example, she noted the challenges the IRS had in accomplishing its tasks given the COVID-19 pandemic and the added responsibility of three rounds of stimulus payments.

At the end of the 2021 tax filing season, the IRS had a backlog of over 35 million individual and business income tax returns that required manual processing. The backlog included roughly 16.8 million paper tax returns waiting to be processed, about 15.8 million returns that were suspended during processing and required further review, and approximately 2.7 million amended returns that awaited processing.

The backlog largely was due to the pandemic, which brought social-distancing measures that kept many employees away from IRS offices.

As Collins noted: “The pandemic exposed weaknesses and vulnerabilities that must be strengthened ... and it is causing the IRS and congressional overseers to collaborate on steps to improve the IRS’s performance going forward to provide taxpayers with the service they deserve.”

The advocate recommended a number of steps for the IRS to take, among them reducing barriers for the e-filing of returns and expanding callback technology for the high-volume toll-free IRS telephone lines. My readers will be pleased when these improvements are implemented.

You can review the full list of recommendations at tinyurl.com/m7k7b4yd.

The IRS agreed to implement 48 of 73 recommendations (in full or part) made by Collins previously in her year-end report (see Appendix 1 at tinyurl.com/4k6ee66m).

If you are still waiting on the IRS in frustration, positive changes may yet come out of this pandemic-related tax turmoil.

As Collins wrote: “In the coming months, the IRS must work through its backlog of tax returns and be current in processing its correspondence while focusing on rebuilding itself to become a more efficient and taxpayer-centric organization. In the coming years, the IRS must modernize its operations to better meet taxpayer needs, reduce administrative burdens, and improve the delivery of services.”

Let’s hope next year is not as challenging at tax time as this one has been, especially for those who are financially in need.

Julie Jason, JD, LLM, a personal money manager (Jackson, Grant Investment Advisers Inc. of Stamford, Connecticut) and award-winning author, welcomes your questions/comments (readers@juliejason.com). Please visit www.juliejason.com.

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Do you have a child or grandchild who has been drawn to stock trading through the internet or an app?

While I’m a proponent of investing for all ages, I’m hardly a fan of kids entering the markets without training or supervision. If you feel the same way, you’ll want to know about a new resource, announced at the end of June by FINRA (the Financial Industry Regulatory Authority, which regulates brokerage firms), that I expect to be very helpful -- both to you and to regulators (if you are willing to submit comments).

FINRA’s new initiative (tinyurl.com/ftz7by8) is a massive project that will have an impact on investors both young and not so young.

It’s a multiyear, multifaceted $30 million initiative, whose goal is to provide kids with information that can help them make good investment decisions and avoid mistakes.

That’s an incredibly worthwhile goal. This is FINRA’s ask for comments: “Given the recent influx of novice retail investors into U.S. securities markets coupled with rapid advancements in technology, FINRA requests comments from firms, investors, investor advocates, academics, investor and financial education providers (for-profit and nonprofit) and other stakeholders concerning effective ways to reach today’s investors. We are especially interested in comments pertaining to younger, novice investors and people who have yet to participate in investing outside an employer-sponsored retirement plan.”

FINRA is asking for comments on 10 questions, which you can see at tinyurl.com/3x7m67p9. You’ll find instructions on how to comment there as well. Here are a couple of examples for educators:

“Which methods of educating investors have worked best to increase investor knowledge among self-directed retail investors? Please describe the modes and channels used to reach people and the demographic characteristics of the target audience for such efforts. What should be FINRA’s role with regard to educating self-directed investors?”

“Does simulated trading help educate investors or potential investors about different aspects of investing, such as risk, diversification, costs and performance?”

In case you have not seen a simulator, take a look at a free one offered by the SIFMA Foundation called The Stock Market Game, which you can find at tinyurl.com/3yueuzkc. The SIFMA Foundation is a nonprofit organization focused on increasing understanding of the financial markets.

The comment period, which is now open and ends on Aug. 30, 2021, is the first phase of the project. The second is a comprehensive program “aimed at educating this rapidly-growing segment of novice retail investors who are leveraging advancements in technology to enter U.S. securities markets.” Retail investors are non-professionals who buy and sell securities or funds.

If you are interested in reading comments that have already been submitted, you can find them here: tinyurl.com/54f4rmc9.

Education is needed on all levels. FINRA Foundation’s most recent investor survey (tinyurl.com/wfcbj2tx) found some troubling trends, as investor knowledge in the United States was low among all investors, and many investors were confused about the various fees they pay for investing.

New investors had less investment knowledge than others. For example, in a separate study done by the FINRA Foundation with the research organization NORC at the University of Chicago (tinyurl.com/v9ed6xyy), new investors, when tested, on average answered only 1.4 out of 5 investment knowledge questions correctly.

As Robert Cook, president and CEO of FINRA and chair of the FINRA Foundation, said, “It is critical that newer investors understand both the benefits and the risks of participating in the financial markets.” Who can disagree?

To stay up to date on this noteworthy cause, visit www.finrafoundation.org. Write to me at readers@juliejason.com with some of your suggestions, as well.

Julie Jason, JD, LLM, a personal money manager (Jackson, Grant Investment Advisers Inc. of Stamford, Connecticut) and award-winning author, welcomes your questions/comments (readers@juliejason.com). Please visit www.juliejason.com.

DISTRIBUTED BY ANDREWS MCMEEL SYNDICATION

Not that I would want you to keep up with “the Joneses,” but are you saving for retirement? Don’t be left out. Retirement savings is in full swing right now.

Fidelity Investments, considered the top provider of individual retirement accounts (IRAs) in the United States, recently released its 2021 first-quarter analysis of retirement accounts (tinyurl.com/287wuecn), with the headline being that average balances among more than 30 million IRA, 401(k) and 403(b) retirement accounts reached record levels for the second consecutive quarter.

That’s especially noteworthy considering the financial challenges related to retirement savings that occurred during the pandemic. Some companies temporarily suspended matching contributions for 401(k)s, while a recent MagnifyMoney poll (tinyurl.com/physhf46) indicated that nearly 48% of those surveyed who had a retirement savings account either stopped saving during the pandemic or decreased their retirement contributions.

Yet according to the Fidelity analysis, the average IRA balance was $130,000, a 31% increase from the first quarter of 2020. The average balances for 401(k)s ($123,900, up 36%) and 403(b)s (a record $107,300, up 42%) also saw a big advance in 2021 from the first quarter of 2020.

Kevin Barry, the president of workplace investing at Fidelity, said in a statement that “individuals can’t control how the market performs from quarter to quarter or year to year. What they can control is establishing and sticking to consistent, positive savings behaviors.”

Fidelity noted that one factor for the growth in IRA contributions during the first quarter of 2021 involved the time of the year, as some investors sought to make a tax-deferred contribution ahead of the deadline for filing their 2020 tax returns. Overall, contributions were made to 1.3 million IRA accounts in 2021’s first quarter, a gain of 52% from the same quarter in 2020.

Another positive trend involved younger people saving for retirement, as 26% of overall IRA contributions in 2021’s first quarter were being made by investors under the age of 35 (climbing from 23% in the first quarter of 2020). I would like to see that percentage continue to grow.

I’m also a fan of Roth IRAs, which offer tax-free withdrawals in retirement. According to Fidelity, the money flowing into Roth IRAs made up 60% of all IRA contributions for the first quarter of 2021.

Good news was also in evidence when it came to employer contributions. According to Fidelity, 95.5% of individuals on its 401(k) platform had some form of contribution to their account in the first quarter, with 83.6% making a contribution to their 401(k) and receiving an employer contribution; 7.3% making a contribution but not receiving an employer contribution; and 4.5% receiving only some type of employer contribution.

According to Fidelity, the average 401(k) employer contribution rate was 4.6% (with the average amount contributed being $1,720). The most popular formula for 401(k) matches? It continued to be a 100% matching contribution for the first 3% of an employee’s contribution, with a 50% match for the employee’s next 2%. In my view, that is “free money” for retirement savers, something everyone needs to take advantage of.

With financial challenges still being felt by many people, it might seem somewhat surprising that the percentage of workers who had an outstanding 401(k) loan declined to 17.5% in the first quarter of 2021 from 19.7% in the same quarter of 2020. Only 1.6% of 401(k) savers started a new loan during the first quarter of 2021, down from 2.4% a year earlier, while the percentage of workers who made a withdrawal from their 401(k) (including hardship withdrawals) dropped to 2.4% in the first quarter of 2021 from 3% the year prior.

In a separate study, Fidelity asked respondents how they used the money from their most recent 401(k) or 403(b) loan or withdrawal. Forty-four percent cited paying down or off debt, while 37% used it for home expenses (including buying a home or making improvements to one). Interestingly, 60% chose the loan option because they preferred borrowing from themselves over borrowing from others.

Borrowing from yourself reminds me of an old adage that I’ve mentioned before, one that is appropriate to those who are successful in saving for retirement: Pay yourself first. If the pandemic has caused you to move away from investing in your retirement, try to get back to it as quickly as you can.

Julie Jason, JD, LLM, a personal money manager (Jackson, Grant Investment Advisers Inc. of Stamford, Connecticut) and award-winning author, welcomes your questions/comments (readers@juliejason.com). Please visit www.juliejason.com.

DISTRIBUTED BY ANDREWS MCMEEL SYNDICATION