IRS scrambles to prepare tax documents, refunds could be delayed
NASHVILLE, Tenn. -
The political wrangling over the Fiscal Cliff deal went down to the wire before Congress could strike a deal to avoid major tax increases for all taxpayers.
Now, the IRS is reviewing the details of the Fiscal Cliff legislation, assessing what effect the new tax laws will have on the 2012 filing season.
The April 15 deadline to file federal taxes is still months away, but many taxpayers who are owed refunds from Uncle Sam are eager to file early, hoping to get their checks that much sooner.
John Crow is Senior Tax Advisor at Humphres and Associates. He's been helping his clients with their taxes since the mid-70s.
"It was still a time when you could prepare a tax return by hand," Crow reminisced.
Crow told Nashville's News 2 that most of the changes in the Fiscal Cliff bill won't take effect until the 2013 filing season.
However, uncertainty surrounding the negotiations now has the IRS scrambling to make sure the 2012 tax forms are ready and accurate.
"What we're basically going to be looking at is primarily a delay in terms of making sure that all the forms have been revised and at least are in compliance with the tax provisions that have been extended," Crow told Nashville's News 2.
According to the IRS, filing returns via e-file is the quickest way for taxpayers to get their hands on tax refund money.
Filing typically starts in mid-January, but so far the IRS hasn't announced when it will start accepting tax returns.
"We've already been notified by our software vendor that there's a major update and release of forms that we will be receiving on January 9, which leaves a very short window between that initial release of forms and that e-file filing date," said Crow.
Taxpayers are not pleased at the prospect of delayed refunds.
"I think it stinks," said Lynn Brading. "That means the government is making interest off my money that they're holding onto."
If filing dates are in fact pushed back, it is likely that refund money could be delayed as well.
The IRS has faced similar situations in past years.
In 2010 tax season didn't start until mid-February because lawmakers did not finish a tax deal until mid-December.
In 1986, congress tackled a major tax overhaul which also had an impact on the start of filing season.