The waiting room of Robert Kowalski’s auto shop on Milwaukee’s south side smells like motor oil and burned coffee. When I visited on a Tuesday morning in late March 2026, two cars sat in the bays and a third had been there, untouched, for four days. Robert — broad-shouldered, grease under his fingernails, a man who clearly prefers doing things himself — handed me a paper cup and sat down across a metal desk stacked with invoices and a folder marked, in blue marker, IRS 2025.
He had been waiting 78 days for a federal tax refund he needed badly. What finally arrived was $253 less than he expected, for a reason he still finds hard to accept.
Eighteen Years In, and the Ground Is Shifting
Robert Kowalski, 52, has owned Kowalski’s Repair and Service since 2008. For most of that time, business was steady enough. He employs two part-time mechanics, handles diagnostics himself, and built a loyal customer base on honest pricing. Then the cars changed.
Starting around 2022, Robert told me, he began losing jobs to dealerships — not because his work was inferior, but because newer vehicles require proprietary software to complete repairs. Manufacturer-locked diagnostic systems now account for a growing share of complex service work, and independent shops like his often lack the licensing access to do it legally or completely. As Robert explained, “I can get a car halfway fixed and then I have to tell the customer they need to go to the dealer for the rest. That kills my reputation. People just go to the dealer to start with now.”
His son, 18, was accepted to an out-of-state university with annual costs totaling roughly $45,000. His wife’s income — she works as a school paraprofessional — covers groceries and utilities. Robert has no formal retirement savings. The tax refund he was expecting for tax year 2025 was not a windfall. It was a pressure valve.
Why He Expected $3,100 Back
Robert filed his 2025 federal return on February 3, 2026, using a tax preparer he’s worked with for eight years. His gross business receipts came in at approximately $187,000 for the year — down from a peak of $268,000 in 2021. After deductions for shop equipment depreciation under IRS Publication 946, vehicle expenses, and health insurance premiums for himself and his wife, his net self-employment income dropped substantially.
The depreciation deduction — applied to a used diagnostic lift he purchased in 2024 for $18,400 — was claimed under Section 179, which allows eligible businesses to deduct the full cost of qualifying equipment in the year it was placed in service rather than depreciating it over time. His preparer calculated a federal refund of $3,107.
According to the IRS refunds page, most electronically filed returns with direct deposit are processed within 21 days. For self-employed filers with complex deductions, particularly large Section 179 claims, processing times can run longer — though the agency does not publish a specific extended timeline for this category.
Forty-Two Days of Silence
Robert checked the Where’s My Refund tool every morning starting around February 10. “Received” stared back at him for 42 consecutive days. “I thought maybe I did something wrong,” he told me. “My guy has done my taxes for years. But when you’re waiting and nothing moves, you start second-guessing.”
His preparer told him this was not unusual for returns with large Section 179 deductions in the first filing window of the year. The IRS periodically selects such returns for additional verification before releasing refunds, particularly when the deduction represents a significant portion of gross income. Robert’s $18,400 deduction against $187,000 in receipts placed it in a range that can trigger automated review flags.
The Part He Didn’t See Coming
On March 22, 2026 — 78 days after he filed — Robert’s direct deposit arrived. The amount was $2,854. That same day, a CP49 notice from the IRS arrived by mail explaining that $253 of his refund had been applied to an outstanding balance: an underpayment penalty from his 2023 tax return.
As Robert explained it to me, he had a difficult year in 2023 and missed two quarterly estimated tax payments required under IRS rules for self-employed individuals. According to IRS guidance on estimated taxes, self-employed individuals are generally required to make quarterly payments if they expect to owe $1,000 or more in federal taxes for the year. Missing those payments can result in a penalty calculated on the amount owed and the length of the underpayment period.
Robert hadn’t forgotten about 2023’s penalty — his preparer had mentioned it. What he hadn’t fully registered was that the IRS would pull it directly from this refund. “I knew I owed it,” he said, sitting back in his chair. “I just didn’t think they’d take it without telling me first. The letter came the same day as the deposit. By then it was done.”
What $2,854 Means in a Year Like This
The money landed in Robert’s business checking account on a Saturday. By Monday, $1,400 had already been allocated toward a parts supplier invoice he’d been carrying since January. Another $800 went toward the shop’s liability insurance renewal. The remaining $654 went into what Robert described, without sentimentality, as “the pile” — a general account he and his wife use to manage month-to-month gaps.
His son’s university enrollment deposit deadline is May 1. The first semester’s tuition bill — roughly $22,500 — arrives in July. Robert told me he doesn’t know how he’ll cover it. He said this without drama, the way a mechanic describes a complicated repair: as a problem with a solution that just hasn’t presented itself yet.
When I asked Robert whether the delay itself — the 78 days — had caused concrete harm, he paused before answering. He’d had to delay purchasing a scan tool compatible with newer vehicle software, something he needs to stay competitive. The tool costs approximately $3,200. He had planned to buy it once the refund arrived. As of March 30, he still hasn’t ordered it.
The Broader Picture for Self-Employed Filers
Robert’s experience is not unusual, though it is also not the norm. The IRS processed approximately 150 million individual returns in 2025, and the vast majority of electronically filed returns with direct deposit were completed within the agency’s standard 21-day window. Returns flagged for additional review — a category that includes complex Schedule C filings with large deductions — can take considerably longer, with no guaranteed timeline.
For self-employed filers with outstanding estimated tax penalties, the CP49 offset process means the refund amount they see on their tax software may not reflect what actually deposits. The gap between expected and received can range from a few dollars to hundreds, depending on penalty history.
Robert knew, intellectually, that the 2023 penalty existed. What the experience clarified for him — in a way that a letter or a conversation hadn’t — was that the IRS tracks these balances continuously and will collect them when the opportunity arrives. “I learned something,” he told me near the end of our conversation. “They’re patient. They’ll wait until you have something, and then they’ll take what’s theirs first.”
He said it without bitterness, which surprised me. It sounded more like the observation of a man who had finally, at 52, stopped being surprised by systems that don’t bend for individuals. His son’s enrollment deposit is still unpaid. The scan tool is still on a website in his browser’s saved tabs. And the shop’s two bays were still running when I drove away that Tuesday — proof, at minimum, that Robert Kowalski is still in the fight.
Related: The IRS Letter That Almost Cost Me My Full 2025 Tax Refund — And What You Can Do Right Now
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