The delay is necessary to “allow adequate time to program and test tax-processing systems” after the closure, the agency said in a statement.
The IRS said its preparations help protect against refund fraud, a growing concern among watchdogs. An inspector general’s report released Tuesday revealed that the agency paid out nearly $111 billion in earned-income tax credits over the past 10 years to people who didn’t qualify for them.
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 Tuesday’s statement.
The original filing season was set to begin Jan. 21. The delay would cause the season to begin no earlier than Jan. 28 and no later than Feb. 4, the IRS said.
The usual April 15 filing deadline will remain in place as a matter of federal law.
The IRS said the shutdown came during the “peak period” for readying its processing systems. The agency implements updates annually to reflect new tax law and to make programming changes, according to the statement.
Acting IRS Commissioner Daniel Werfel said the 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.”
Some Republicans have expressed skepticism about the necessity for the IRS delay.
“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 M. Levin (Mich.), the committee’s ranking Democrat, blamed the postponement on GOP lawmakers, many of whom tried unsuccessfully to delay provisions within the Affordable Care Act as a condition of funding 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 has struggled with improper payments of earned-income tax credits during the current administration. In 2010, the total reached between $15.3 billion and $18.4 billion, according to the report from Treasury Inspector General J. Russell George.
The agency reduced its faulty payments to between $11.6 billion and $13.6 billion in 2012, but that amount is still higher than the range of $11.2 billion to $13.3 billion after 2009, President Obama’s first year in office.
The inspector general’s report said the IRS “has made little improvement in reducing improper EITC payments as a whole since it has been required to report estimates of these payments to Congress.”
The agency said in response to the findings that it would develop processes for tracking its progress on the issue and identifying high-dollar improper payments.