Tax Refunds Delayed Due to Problem with Form 8863 Issued Sooner than Expected

By Frank Byrt 

On March 27, the IRS announced the expedited processing of some 600,000 tax returns filing Form 8863, Education Credits, that were delayed due to "a problem with a limited number of software company products." The IRS said it expects to issue nearly all applicable refunds by early to mid-April, which is sooner than previously anticipated.   
 
"Due to the special steps the IRS took to help these taxpayers, the work is being completed more quickly than anticipated – in two to four weeks. Many affected taxpayers have already received their refunds and more are on their way," the IRS said on its website. 
 
The delay first came to light on March 12. At that time, the IRS estimated it would take up to six weeks from that date to issue refunds to the impacted taxpayers.
 
On March 13, H&R Block admitted to the problem on its Facebook page: "There was an issue with a limited number of software company products that affected some tax returns filed between February 14 and 22, 2013. These affected returns included certain education tax credits claimed on Form 8863." Later that same day, the IRS issued a statement that the error could impact approximately 600,000 returns.
 
Taxpayers affected by this issue can check "Where's My Refund?" on IRS.gov to determine the status of their refund. The website is usually updated overnight, so taxpayers only need to check it once a day.
 
H&R Block now faces several class-action lawsuits filed on behalf of some taxpayers whose returns were delayed. In a case filed March 19 in US District Court in the Eastern District of Michigan, two customers charged H&R Block with breach of contract and negligence. They are suing for $5 million, the Kansas City Star reported. 
 
Related articles:
 

You may like these other stories...

Many senior US tax professionals believe that a streamlined audit process will be the top benefit resulting from the IRS Transfer Pricing Audit Roadmap, a new toolkit organized around a notional 24-month audit timeline,...
Tax accounting to be simplified for money-market fundsThe US Securities and Exchange Commission (SEC) voted 3-2 on Wednesday for sweeping changes to institutional money-market funds, Emily Chasan, senior editor of...
By Cathy Stopyra and Todd SimmensUnderpayment interest, refund interest, and penalties charged to businesses are just a few of the considerations the IRS calculates when determining taxation for a given company. Though...

Upcoming CPE Webinars

Jul 31
In this session Excel expert David Ringstrom helps beginners get up to speed in Microsoft Excel. However, even experienced Excel users will learn some new tricks, particularly when David discusses under-utilized aspects of Excel.
Aug 5
This webcast will focus on accounting and disclosure policies for various types of consolidations and business combinations.
Aug 20
In this session we'll review best practices for how to generate interest in your firm’s services.