As you no doubt recall, Congress spent much of December attempting to find a solution to the “fiscal cliff” that the nation faced. One of the many “side effects” of this debate had to do with the IRS—and specifically, their ability to prepare to process 2012 tax returns.
As December wound down, many analysts feared that the drawn-out negotiation would lead to chaos over at the IRS. However, it seems as if the worst of these fears have been abated, as the IRS is set to begin processing returns at the end of this month.
The Internal Revenue Service will start processing tax returns for the vast majority of filers on Jan. 30. The agency had planned to open the tax season on Jan. 22, but had to push back the date because Congress took until New Year’s Day to pass needed tax provisions.
The IRS then had to reprogram its computers and forms to reflect the late changes. The dithering on Capitol Hill forced the agency to print tax forms last month with lines marked as “reserved” as placeholders for the pending legislation.
The IRS will accept returns of more than 120 million filers starting Jan. 30. But certain taxpayers, including those claiming residential energy credits, depreciation of property or general business credits will have to wait until late February or March to send in their returns since their forms require more extensive programming. Most filers in this group have more complex tax returns and typically file closer to April 15 or obtain an extension, the IRS said.
Had Congress not acted on the alternative minimum tax, up to 100 million taxpayers would not have been able to file their returns — or collect refunds, if owed — until late March, Steven Miller, the agency’s acting commissioner, said last month. (The AMT itself would hit nearly 30 million filers with higher tax bills, and delay returns for other filers as the IRS adjusted its systems.)
This is good news for taxpayers expecting a refund check this year. If you would like to learn more, or if you need help preparing your taxes or facing an IRS dispute, please get in touch with us today!