IRS Delays Accepting Returns That Include 31 Types of Forms
By Frank Byrt
The IRS announced January 28, 2013, that it won't accept returns for processing that include Form 8863, Education Credits, until mid-February, or two weeks after the 2013 tax filing season begins. The IRS also won't accept returns that include thirty other tax forms used to claim credits or deductions until sometime in February or March because they all needed revisions.
Preeminent among them is Form 4562, Depreciation and Amortization.
IRS Forms Being Updated/Not Yet Available
Thirty-one IRS forms that 1040 filers cannot begin filing until late February or March 2013 until they become available:
- Form 3800, General Business Credit
- Form 4136, Credit for Federal Tax Paid on Fuels
- Form 4562, Depreciation and Amortization (Including Information on Listed Property)
- Form 5074, Allocation of Individual Income Tax to Guam or the Commonwealth of the Northern Mariana Islands
- Form 5471, Information Return of U.S. Persons with Respect to Certain Foreign Corporations
- Form 5695, Residential Energy Credits
- Form 5735, American Samoa Economic Development Credit
- Form 5884, Work Opportunity Credit
- Form 6478, Credit for Alcohol Used as Fuel
- Form 6765, Credit for Increasing Research Activities
- Form 8396, Mortgage Interest Credit
- Form 8582, Passive Activity Loss Limitations
- Form 8820, Orphan Drug Credit
- Form 8834, Qualified Plug-in Electric and Electric Vehicle Credit
- Form 8839, Qualified Adoption Expenses
- Form 8844, Empowerment Zone and Renewal Community Employment Credit
- Form 8845, Indian Employment Credit
- Form 8859, District of Columbia First-Time Homebuyer Credit
- Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits)
- Form 8864, Biodiesel and Renewable Diesel Fuels Credit
- Form 8874, New Markets Credits
- Form 8900, Qualified Railroad Track Maintenance Credit
- Form 8903, Domestic Production Activities Deduction
- Form 8908, Energy Efficient Home Credit
- Form 8909, Energy Efficient Appliance Credit
- Form 8910, Alternative Motor Vehicle Credit
- Form 8911, Alternative Fuel Vehicle Refueling Property Credit
- Form 8912, Credit to Holders of Tax Credit Bonds
- Form 8923, Mine Rescue Team Training Credit
- Form 8932, Credit for Employer Differential Wage Payments
- Form 8936, Qualified Plug-in Electric Drive Motor Vehicle Credit
The delay is a result of Congress not having approved tax law changes under the American Taxpayer Relief Act until January 2. That caused the IRS to push back the opening of tax filing system to January 30 and required changes to certain subsidiary tax forms along with its return-processing system.
"No action needs to be taken by the taxpayer or their tax professional," the IRS said, in a January 28 website posting regarding Form 8863, Education Credits, which is used to claim two types of higher education credits: the American Opportunity Tax Credit and the Lifetime Learning Credit.
It isn't expected to have a large impact as "typically through the mid-February period, about three million tax returns include Form 8863, less than a quarter of those filed during the year," the IRS said.
The IRS also noted that the delay will have no impact on taxpayers claiming other education-related tax benefits, including those "claiming the student loan interest deduction on the Form 1040 series or the higher education tuition or fees on Form 8917, Tuition and Fees Deduction." They will be able to file beginning January 30.
But the IRS also said that 1040 filers using thirty other subsidiary tax forms used to claim deductions or credits cannot file until those forms become available because they required changes that have caused similar processing issues. A date will be announced when these forms will be accepted, but that date will probably be in late February or March, the IRS said.
Benson Goldstein, senior technical manager on the AICPA tax staff, told AccountingWEB in an interview that the AICPA hasn't received a lot of calls about the problems these issues may present, most likely because tax season just started.
But he added that Form 4562, Depreciation and Amortization (Including Information on Listed Property), "is very important" for taxpayers and preparers, so any delays in the availability of it and other forms, potentially out as far as March, "can cause traffic bottlenecks for tax preparers and their offices.
"We have raised this issue with the IRS in the last several days and used the depreciation form as an example. We are encouraging them to get the forms out as timely as possible," Goldstein said.
Carol Benintendi, a CPA practicing in Newtonville, Massachusetts, told AccountingWEB, "This is going to make my life hell. Today I'm trying to get some business returns done," but without the availability of several forms on her firm's tax preparation software, she said she can only prepare a business return with a depreciation deduction to a certain point before having to put it aside and move on to the next one and do the same, knowing that she'll have to return to them once the IRS issues the revised forms.
"The biggest concern for me is the depreciation [form]. My clients are mostly businesses or individuals who are self-employed or have rental activity," so it's crucial to completing the return, she said.
Eventually, she says, there will be a deadline crunch for tax preparers once the new forms become available, because they'll then have to rush to complete returns and then get together with clients so they can review and sign them ahead of the filing deadline. "I personally wouldn't send [a return] to clients for approval until it's final because you can't anticipate what might change.
"It's frustrating, but this is one of those times I can't blame the IRS," Benintendi said, since Congress didn't approve changes to the tax laws in enough time to give the IRS a chance to revise the tax forms and test its processing software before the start of tax season.
Similarly, Shayna Chapman, a partner in Chapman & Burris CPAs LLC in Gallipolis, Ohio, told AccountingWEB that most of her firm's clients are businesses, so they would use Form 4562 for a depreciation deduction, while the Form 8863, Education Credit, is less of a concern.
"It's a little bit of a big deal" with the depreciation form, she said, because the IRS says you can't sit on your tax returns and then e-file them all at once.
"But that's exactly what we'll have to do" if there are significant delays in release of the forms. "So we have to do as much as we can, then move [the returns] to the side, and then when the forms get released, we can start e-filing. There could be a bottleneck since everybody's going to push through at the same time."
Chapman said she'll keep clients notified on the process via her firm's Facebook page, or she'll contact them directly via text message and e-mail.
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