IRS to delay tax-filing season up to two weeks

(Dan Acker/Bloomberg)

(Dan Acker/Bloomberg)

The Internal Revenue Service plans to delay the tax-filing season up to two weeks as a result of the 16-day government shutdown that ended last week, the agency announced Tuesday.

The move could have an adverse impact on taxpayers who rely on timely refunds to make ends meet, as they would have to wait longer to submit their information for a check.

The delay was necessary to “allow adequate time to program and test tax processing systems” after the partial government closure, the agency said in a statement.

The IRS is exploring options to shorten the expected delay and will announce a final decision on the start of the 2014 filing season in December, according to the statement.

The original filing season was set to begin Jan. 21. It would begin no earlier than Jan. 28 and no later than Feb. 4 with the delay, according to the statement.

The usual April 15 filing deadline will remain in place as a matter of federal law.

The IRS said the government closure came during “the peak period” for readying its processing systems and that the agency is facing increasing demands to protect against refund fraud.

An inspector general’s report released on Tuesday revealed that the IRS paid out more than $110 billion in earned-income tax credits over the past 10 years to people who didn’t qualify for them.

Acting IRS Commissioner Daniel Werfel said the agency’s processing preparations are “an intricate, detailed process, and we must take time to get it right.” He added that the delay will give the agency time to “program, test and validate our systems.”

The IRS updates its systems annually to reflect new tax law and to make programming changes, according to the agency’s statement.

Some Republican lawmakers have expressed skepticism about whether the IRS delay is necessary.

“Considering the IRS has dealt with much larger changes on far shorter notice over the past years without delay, its reasons are suspect,” said Sarah Swinehart, a spokeswoman for House Ways and Means Committee Chairman Dave Camp (R-Mich.)

Rep. Sander Levin (D-Mich.), the committee’s ranking member, blamed the delay on the GOP lawmakers who insisted unsuccessfully on delaying certain provisions within the Affordable Care Act as a condition of reaching a deal to fund the government.

“This is yet another unfortunate effect of a shutdown that Republicans should have never caused,” Levin said in a statement. “The entirety of the shutdown’s harmful impact won’t be known for months, if not longer. But what is already clear is that it has cost our economy tens of billions of dollars and tens of thousands of jobs. This tax-filing delay just adds insult to injury for Americans hoping to get a jump start on their tax refunds in January.”

The IRS announcement comes in the midst of ongoing problems with the launch of HealthCare.gov, an online health-insurance marketplace the federal government launched this month as a result of President Obama’s signature health-care legislation, the Affordable Care Act.

The Web site froze shortly after going live on Oct. 1, and potential enrollees have experienced problems — including being locked out — for weeks since then.

Some Web experts say the HealthCare.gov problems underscore flawed IT policies for the federal government, according to a recent Washington Post report. Analysts contend that many agencies hire Web-development firms that are more adept at landing contracts in a complicated procurement system than creating user-friendly products.

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