Tax season will begin Jan. 28 as planned and taxpayers can expect refunds to be sent out as usual Senator Chuck Grassley said Wednesday on the Senate floor.
“This makes common sense,” said Grassley “A tax refund represents the taxpayer’s money, not Congress’, not the government’s, but the taxpayer’s — despite what some people in Congress seem to think. It should be returned in a timely fashion.”
Grassley said approximately 75 percent of individuals receiving a tax refund use them to make large purchases they could not otherwise afford, such as new hot water heaters or down payments on vehicles, and some use their refund to stretch the family budget.
The government shutdown raises questions about just how efficient and timely the IRS will be in issuing those refunds, however.
“(The IRS) currently have 10,000 employees, which is about 12 percent of their workforce, and they’re bringing back another 46,000, which brings them up to 57 percent,” said Robert Snodgrass, a certified public accountant at Draper, Snodgrass, Mikkelsen and Company. “Even with 57 percent, in my mind, there’s a question about whether they’ll be able to process everything in a timely manner, at least as timely at the taxpayers would like it to be.”
Individuals who have issues with the IRS are off the hook for the time being, said Snodgrass.
“You may receive correspondence from them, and you can write back, but there’s not going to be anybody there to handle it,” said Snodgrass. “They will not be performing any audits during the shutdown. That does not mean they won’t send out automatic notices through their matching process if you filed some information on a 1099, for example, that they do not agree with. Those notices are still going to go out, but any face-to-face audits will not take place.”
In addition to the IRS’s reduced workforce, changes in the tax code are likely to confuse taxpayers, prompting increased call volume into the IRS help lines.
“You’ve got the biggest tax changes in a 30 year history,” said Snodgrass. “You’re going to have people with a lot of questions. They’re going to have a hard time getting to the IRS to get answers.”
Elizabeth Green, an enrolled agent, at Green Accounting and Tax, LLC, said, as a tax preparer, she has been experiencing longer than normal wait times and expects that to continue as the shutdown drags on.
Whether or not filing will be easier or harder with the changes, Green said she cannot say.
“They’re very much different,” said Green. “What was two pages for a 1040 is now still two pages, with an additional six schedules.”
How the changes in the tax code affect taxpayers remains to be seen.
“For the majority, their calculated tax will be less than what it was a year ago, but they could owe more because of withholding table issues,” said Snodgrass. “Some won’t, too. There’s always winners and losers. You just hope you’re one of the winners, but that’s not always the case.”
It’s going to be a different year and if they have questions, I urge them to talk to their tax preparer,” said Green.