Contributed by Victoria K. Spencer, J.D. , The U.S. Internal Revenue Service (“IRS”) has delayed the start of next year’s tax filing season. It was scheduled to begin January 21, 2014. As of today, the IRS will begin to accept returns for the tax year 2013 no earlier than January 28, 2014. A final date will be determined sometime in December. One of the reasons the IRS gives for such delay is the time it takes for them to program, test and deploy their systems that process incoming tax returns. The fact that the IRS furloughed more than 90 percent of its employees during the recent shutdown occurring October 1, 2013 through October 17, 2013 put them behind in this process by approximately three weeks. This is the second year in a row that the IRS has postponed filing. The IRS began accepting tax returns for the tax year 2012 on January 30, 2013 after Congress delayed implementation of certain tax policies pertaining to tax returns for the tax year 2012. The delay won’t change the April 15, 2014 deadline for taxpayers or the fact that companies must still send W-2 and other tax forms on schedule, but it could delay refunds. The federal debt limit has been suspended through February 7, 2014. Due to the delay in filing, the IRS may issue more refunds after February 7, 2014 than initially projected prior to the delay. As a result, a lapse in borrowing authority may occur sooner than anticipated, perhaps sometime between the end of February and the end of March 2014. Should the government shut down again in January over budget talks scheduled as part of the agreement to re-open the government, refunds could be delayed even longer. The delay will likely also create a backlog of tax returns from the first day of filing as opposed to equally delaying all returns.
We here at KeatsConnelly are well staffed and prepared to adjust to this announcement as we approach the 2014 tax season. However, we bear frustration on behalf of our clients who are reputable taxpayers among the millions who file timely tax returns. Our recommendation to clients anticipating filing by the April 15, 2014 deadline and expecting a refund is to provide us with all 2013 tax information as soon as possible. The closer to the start date that we can file, the more quickly a refund will likely be received. Furthermore, when possible, we recommend e-file with direct deposit so as to also ensure a quicker refund. We also encourage our clients who are attempting to contact the IRS to wait to call or visit if their issue is not urgent and to continue to utilize IRS website applications if possible. The IRS is experiencing an immense backlog resulting from the shutdown and is currently doing everything they can to work through it. Finally, should any of our clients have questions, comments or concerns regarding this issue, they should feel free to contact us at any time. We thank them for their patience on this matter and for their business.