Government Shutdown to Delay 2014 Tax Filing Season

The federal government shutdown created problems for millions of Americans and it looks like it will continue to impact taxpayers into next year. The IRS has announced that due to the shutdown, it expects the 2014 tax filing season to be delayed by up to two weeks.

In an announcement issued on October 22nd, the IRS cited complications from the shutdown as the cause of the delay. The IRS uses more than 50 computer systems to handle processing of tax returns and the shutdown occurred during the peak period in which these systems were being programmed and tested. Approximately 90 percent of IRS operations were closed during this time, which is believed to have put the agency about three weeks behind in preparing for the upcoming tax season.

“Readying our systems to handle the tax season is an intricate, detailed process, and we must take the time to get it right,” acting IRS Commissioner Danny Werfel said. A final decision about when the 2014 filing season will begin is expected to come sometime in December.
During the shutdown, the IRS received approximately 400,000 pieces of correspondence, adding to the million or so outstanding items that required attention. The agency has said that since resuming operations, it has experienced a higher demand on telephone lines, walk-in sites and other services from both taxpayers and tax preparers.

The IRS is currently exploring its options to try and short the delay. The filing season was originally set to start on January 21st, which means a delay could put the start date somewhere between January 28th and February 4th. The IRS won’t begin processing any paper or electronic returns received until the official start date.

Unless the IRS is able to get up to speed more quickly, this will be the second year in a row that tax filing has been delayed. Last year it was pushed back due to tax law changes that took effect on January 2nd to help the nation avoid the fiscal cliff. The IRS didn’t start accepting returns until January 30th and some taxpayers had to push back their filing to February or March due to changes in the processing systems.

Despite the IRS taking longer to process returns, taxpayers will still have to file by April 15th and employers are required to get tax forms out by the end of January. The IRS has said that it will not change the estimated 21-day turnaround time for processing refunds received electronically. E-filing is still the fastest way to get your refund if you’re owed one.

The delay on tax filing is just one hundreds caused by the 16-day government shutdown, the first in almost 20 years. The release of major economic reports from the Labor Department and the Treasury were pushed back and NASA was forced to reschedule a rocket launch. The National Transportation and Safety Board also had to delay accident investigations and hearings. With another potential shutdown looming in January, Americans could be feeling the pinch again, which may mean having to wait even longer for tax refunds.