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IRS delays start of tax filing season to January 30
The Internal Revenue Service said on Tuesday it will begin accepting 2012 tax filings on January 30, eight days later than originally planned, meaning millions of early-filing taxpayers will have to wait until February at the earliest for a refund.
More than 120 million households should be able to start filing tax returns on January 30, the agency said.
"This date ensures we have the time we need to update and test our processing systems," IRS acting Commissioner Steven Miller said in a statement.
The delay stems from the January 2 enactment of tax law changes made to resolve the "fiscal cliff," the package of automatic tax increases and federal spending cuts scheduled to start in the new year until averted by last-minute legislation.
The IRS could not write certain tax forms and tables without knowing how the law might reshape the U.S. tax code.
About 18 million taxpayers usually file tax returns in January, and 98 percent of them receive a refund, said tax preparation company H&R Block Inc., citing IRS data. These taxpayers often include low-income individuals who file returns early to get refundable tax credits.
"With refunds now coming several weeks later, those who can afford it the least are impacted the most," said Kathy Pickering, executive director of the Tax Institute at H&R Block.
The filing delay will not affect revenues at H&R Block or its online tax preparation rival, Intuit Inc., said Gil Luria, an analyst with investment firm Wedbush Securities.
Intuit told analysts in December that tax filing delays could shift between $50 million and $70 million of revenue into the company's third quarter.
Block's Pickering said: "We don't expect this will affect our overall volume at all."
The 11th-hour fiscal cliff bill set up another, potentially even more troublesome convergence of events in late February and early March. That is when the bill's two-month delay in spending cuts will end. It is also when the federal government again will hit its borrowing limit and when authorization for the federal budget runs out.
It was unclear what impact these events might have on tax refunds. For instance, if the Treasury Department is forced to prioritize government payouts to avoid hitting the debt ceiling, tax refunds could be delayed, industry participants have said.
IRS officials were asked about the debt ceiling and tax refunds on a conference call Tuesday with businesses. The officials declined to answer specific questions, said sources familiar with the call.
The IRS had to delay the start of the filing season in 2011, but only for those itemizing deductions, affecting 9 million individuals. That delay was also due to late action by Congress.
[Source: By Patrick Temple-West, Reuters, Washington, 08Jan13]
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