By: Sharolyn Hockey
It’s dejà vu all over again! Last year it was the late-hitting American Taxpayer Relief Act of 2012 tax law changes, and this time it’s the shutdown, but once again the Internal Revenue Service won’t be ready on time. Back on October 22, the IRS had already announced a delay of approximately one to two weeks to the start of the 2013 filing season to allow adequate time to program and test its tax processing systems following the 16-day federal government closure.
As this newsletter is going to press, the IRS is exploring options to shorten the expected delay and plans to announce a final decision on the start of the 2014 filing season in December. The original start date of the 2014 filing season was set for Jan. 21, and with a one- to two-week delay, the IRS would start accepting and processing 2013 individual tax returns sometime between Jan. 28 and Feb. 4th.
The government closure came during the peak period for preparing IRS systems for the 2014 filing season. IRS processes, applications, and databases must be updated annually to reflect tax law updates, business process changes, and programming updates in time for the start of the filing season.
Programming, testing, and deployment of more than 50 IRS systems is needed before they can process nearly 150 million tax returns.
Updating these core systems is a complex, year-round process, and the majority of the work begins in the fall of each year. Over 90% of IRS operations were closed during the shutdown, with some major work streams closed entirely during this period, putting the IRS behind its tight timetable for being ready to start the 2014 filing season.
The IRS will not process paper tax returns before the start date, scheduled to be announced in December. There is no advantage to filing on paper before the opening date, and taxpayers will receive their tax refunds much faster by using e-file with direct deposit.
The April 15th tax deadline is inexorable, but taxpayers can request an automatic six-month extension to file their tax returns. The request is easily done with Form 4868, which can be filed electronically or on paper. Taxpayers should remember that the extension is for the filing deadline only and does not extend the time to pay any tax due.