Recently the Internal Revenue Service (IRS) announced that due to the 16-day government shutdown, they will begin processing tax returns one- to two-weeks later than planned. The original start date was Jan. 21, 2014. With this delay, the tax season could begin no earlier than Jan. 28 or as late as Feb. 4. The IRS will not process paper returns until the official start date, even if they are received before the official start date.
This is the second year in a row that the start of tax season has been delayed due to political standoff. At the beginning of this year, the delay was due to the fiscal deal negotiations. The fiscal deal wasn’t passed by Congress or signed by the President until after the first of the year.
Reason For Tax Delay
The purpose of the delay is to allow for additional time to program and test the more than 50 tax processing systems the IRS uses to process the 150 million income tax returns it receives. The majority of the work begins on these systems in the fall, though the work is performed year-round. The shutdown came right at the peak of the programming and testing work. The shutdown has put the IRS nearly three weeks behind schedule. In addition, the IRS has plans to provide additional refund fraud and identity theft detection and preventative measures, which means additional training, programming and testing.
Though the IRS is three weeks behind schedule, it doesn’t mean that taxpayers will be allowed a three-week delay as well. The April 15 filing deadline is set by statute and cannot be extended. The delay makes for a compressed tax season for tax preparers as well. The delay leaves them with roughly 75 days to prepare returns, and less than that if the start date begins in February.
The IRS is exploring options to shorten the delay and will announce a final start date in December.
Federal And State Tax Help
Despite this delay, taxes are still due on April 15. As you close out the year and focus on year-end tax planning, contact Rea & Associates. Our team of federal and state tax professionals stand ready to help you figure out what you owe the government.