Oct 24th 2013
By Ken Berry
According to Dave Camp (R-MI), the powerful chairman of the House Ways and Means Committee, the IRS' decision to postpone the start of the upcoming tax-filing season could adversely affect taxpayers banking on early refunds. Camp has gone on record about his feelings in a letter sent to Acting IRS Commissioner Daniel Werfel on October 23.
"Given that the agency has already had nine full months, and still has nearly three more, there is no reason the IRS should not be able to do its job on time," wrote Camp. "The failure of the IRS to start the filing season as scheduled will be a financial burden to potentially millions of hardworking taxpayers who depend on an early tax refund to pay their rent, make a car payment, or pay off bills from the holiday season."
On October 22, the IRS announced it was forced to push back the start of the 2014 tax-filing season for '13 returns – initially scheduled to kick off on January 21, 2014 – for one to two weeks. The move was attributed to the sixteen-day shutdown paralyzing the federal government earlier this month. The IRS claims it now needs the extra time to program and test tax-processing systems and wade through the backlog it accumulated during the shutdown. It reportedly received 400,000 pieces of correspondence during that time with approximately one million items already awaiting attention.
But the IRS also said it's weighing options for shortening the delay. The nation's tax collection agency is expected to issue a follow-up announcement in December.
The objections raised by Camp can be traced back to a common theme: dissatisfaction with Obamacare. The Republican Congressman points to the controversial health legislation as the real reason for the delay. "While the IRS says it cannot start the filing season on time, somehow it found the most essential operation to be the implementation of the President's health care law," he wrote. "The IRS needs to explain why implementing the President's health care law is more important than processing tax returns in a timely manner."
Sander Levin (D-MI), highest-ranking Democratic member of the Ways and Means Committee, also expressed dismay over the delay, but from a vastly different viewpoint. "This is yet another unfortunate effect of a shutdown that Republicans should have never caused," Levin said in a prepared statement. "The entirety of the shutdown's harmful impact won't be known for months, if not longer. But what is already clear is that it has cost our economy tens of billions of dollars and tens of thousands of jobs. This tax-filing delay just adds insult to injury for Americans hoping to get a jump-start on their tax refunds in January."
Of course, this isn't the first time, nor probably the last, that the IRS has pushed back the start of a tax-filing season, but it's usually related to late legislation enacted by Congress. Due to the slew of tax law changes enacted at the beginning of this year, the IRS delayed the start of the 2013 filing season for eight days, from January 22 to January 30. Some taxpayers claiming certain tax breaks had to wait until February or even March to file their returns. But both taxpayers and tax return preparers alike appear less sympathetic to the IRS' plight this go-round.
There's little doubt that the delay is problematic. Steve Figard, a CPA who operates a small firm in New Egypt, New Jersey, says that early refunds are especially important to filers who are eligible for the Earned Income Tax Credit (EITC). "The refunds some people receive due to the EITC can be substantial," he says. "In many cases, they ask if they can pay my fees out of their refund. They are often desperate for the money." But Figard acknowledges that the problems may not be as pervasive as they were this past tax-filing season, when he says his firm could never recover. "Any delay has repercussions, but last year was horrible," he surmised.
We'll see if public sentiment, as well as the heavy hitters on the Hill, can sway the IRS before the start of tax return season rolls around.
- Shutdown Fallout: IRS Delays 2014 Tax-Filing Season
- Warning of Delayed Start to Tax Season Still Raising Questions: Wolters Kluwer, CCH Provides Analysis, Tax Prep Guidance