The IRS has made plans to clear up the backlog of outstanding motor fuel refund claims owed to energy marketers. Senator Toomey’s (R-PA) office recently informed EMA that the IRS developed a new systematic method to process the backlogged claims, all of which were filed on paper rather than electronically. According to the IRS, the first checks for claims from Q1 and Q2 of 2020 were sent out on January 8. The processing will continue at an accelerated rate until the backlog is cleared by the end of February. The IRS is required to pay interest on claims not processed after 20 days when filed electronically and after 40 days when filed on paper forms. The accumulated interest should be significant but will not be included in refund checks to marketers. The interest on backlogged claims must be calculated manually.
In order to speed processing, the IRS will send two checks to claimants. The first check will pay the refund amount. The second check for the interest owed on the claims will be sent separately, at a later date. Claimants will receive a letter from the IRS explaining the process very soon. In the meantime, the IRS is urging claimants to file all claims electronically to avoid further delays.