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Early Tax Refund? Don’t Count On It.

  • 16 December 2014
  • Author: Cari Holbrook
  • Number of views: 2825
  • 0 Comments
Early Tax Refund?  Don’t Count On It.

You may have recently seen a viral news story claiming the IRS will be delaying refunds for the 2014 tax filing season until after October 15, 2015. That specific claim is false (it was posted on a fake news site).  But if you’re holding out hope for an early refund, don’t hold your breath. The reasons are, well, complicated.

IRS Commissioner John Koskinen recently told attendees at the American Institute of Certified Public Accountants (AICPA) National Tax Conference that the 2015 tax filing season “will be one of the most complicated filing seasons we’ve ever had.”

Koskinen pointed to several contributing factors, beginning with new Patient Protection and Affordable Care Act of 2010 (PPACA) provisions and new responsibilities under the Foreign Account Tax Compliance Act (FATCA).  How might these provisions cause delays? To help deal with these changes, Koskinen says the IRS requested $430 million for processes, forms, and regulations and $300 million to adapt its information technology systems for fiscal 2014. “Of which we got zero,” he said.

Another factor is becoming all too common: extremely late action by Congress on legislation to extend expired tax provisions. In a letter to Senate Finance Committee Chairman Ron Wyden (D., Ore.) this past summer, Koskinen warns that if uncertainty over the expired provisions “persists into December or later, [it] could force the IRS to postpone the opening of the 2015 filing season and delay the processing of tax refunds for millions of taxpayers.”

What’s more, says Koskinen, the IRS will continue to work under constraints that are draining resources and increasing already abysmal response times. The Journal of Accountancy reports, “One result of the decrease in funding is that, while during the 2014 filing season the IRS was able to answer taxpayer’s phone calls 71 percent of the time—higher than in the year before, but ‘still unacceptable,’ [Koskinen] said.”

The percentage of answered phone calls to the IRS is expected to drop to 53 percent in 2015.

Give yourself and your tax advisor plenty of time to navigate the waters. And if you don’t have a tax advisor for the family owned (or closely held) business niche, please contact us to learn more. While a delay may be on the horizon for everyone, mistakes on your return will only exacerbate the problem.  

 

Image Copyright: pixelbliss / 123RF Stock Photo


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