Due to the sixteen-day federal government shutdown, the IRS has announced a 1-2 week delay of the 2014 tax filing season. This means the IRS will not be accepting and processing returns before January 28th at the earliest and February 4th at the latest. What’s worse about the delay is that they are not changing the filing deadline; it is still April 15th.
Why did the shutdown delay the IRS? Because it happened in the midst of the preparation for the upcoming filing season. Every year, in preparation for processing over 150 million tax returns, the IRS updates, programs and tests its system. During the shutdown, the IRS was forced to furlough 90 percent of its workforce as well as close down completely for three days.
How this affects taxpayers
For taxpayers who rely on early refunds to meet financial obligations, this means they will have to wait longer to receive their refund and may be strapped for cash while waiting. For taxpayers who may be seeking assistance or services from IRS, they will not be able to receive either during the delay. This includes phone calls and visits to IRS offices.
What this means for tax preparers
For preparers, their already hectic filing season will now be shortened and the normal lull in March will most likely not happen at all. Along with the delay of the filing season, the IRS announced the delay of PTIN renewals.
The filing season delay will also affect tax businesses who depend on the early revenue to catch up with off-season expenses. On the bright side, the delay will mean tax businesses will have more time to train employees and prepare for the start of the season. They will also save on payroll expenses during the one-two week delay because they will not need to be fully staffed during those times.
Tips
- Tax businesses should still be open with minimal staff to preparer returns even though they cannot be e-filed until later.
- Tax preparers should send out messaging to make all clients aware of the situation before January.
- Taxpayers who have their information should be encouraged to come in to have their returns prepared as early as possible so they can be e-filed as soon as the IRS is ready to accept returns.
Tax preparers, tell us how you are approaching the upcoming delay or how it will affect your business.