What is going on with tax refunds this year? Code 9001, Schedule M or no, NO REFUND... headache!?

My sister and I both filed on January 15th using TaxACT online software. On the 18th, we both received acknowledgement that our returns had been accepted by the IRS. We both expected that we would have our refunds by January 29th. Obviously this did not happen. On January 21th, my status would not pull up on WMR.... show more My sister and I both filed on January 15th using TaxACT online software. On the 18th, we both received acknowledgement that our returns had been accepted by the IRS. We both expected that we would have our refunds by January 29th. Obviously this did not happen. On January 21th, my status would not pull up on WMR. My sisters, however, said: "We are sorry, we cannot provide any information about your refund. For more information, please continue. Please mention reference number 9001 to the IRS Customer Service Representative.". So we consulted the forums and noticed that many other people had the same issues. We were convinced that the IRS was probably backed up and experiencing delays, etc... January 29th comes and guess what... neither of us has a refund. So naturally we consult, WMR. My status reads "We are sorry, we cannot provide any information about your refund. For more information, please continue. Please mention reference number 9001 to the IRS Customer Service Representative." and my sisters reads "We have received your tax return and it is being processed. Unless we find mistakes or you owe other taxes, you should receive your refund by February 9, 2010." Also note that we both had "Schedule M" filed which is some making work pay credit that TurboTAX filed for us without even asking. I don't even know what the heck that is so neither of us claimed it on our taxes last year. Anyway... Today I decided to call the IRS to see what the heck is going on with my refund. Here is a condensed and lightly paraphrased version of the conversation below. This call is in reference to my refund which currently has the 9001 status as my sisters WMR gave her a tentative date of February 9, 2010.

Transcript:

(Asks verification questions - filing status, ssn, address, exemptions). We received your return on the 18th. One moment while I research your account further. (One minute later...) What code are you receiving on the wheres my refund? (ref # 9001). Ok let me see what that code means. (holds for 1-2 minutes). Well, it looks like they've sent you a 4464c letter on the 21st. They are holding your refund for a review. It might take a while, but I'm not 100% sure how long it might take. If we send you another letter, just respond to it and things should progress accordingly. As of now (2/1/10) no additional letters have been sent. Thanks for calling.

Conclusions:

We are both still without refunds, had to cancel major plans, and have decided to change our witholdings status (so PLEASE, no suggestions about that). If you have some knowledgable insight or you're going through the same thing, we'd love to hear from ya. For those of you in the same boat, I'll keep you updated as well. I think some tax laws may have taken into effect that make it more difficult to get refunds this year, but I'm not sure. Any ideas are welcomed as we're both LOST. God bless! :) Trying to smile in the face of not being able to pay the rent which was due today... what a bummer.
Update: 1. I did not receive the EIC. I don't have any dependants.

2. I've only checked the site 3 times sense January 15th.
12 answers 12