IRS States Refunds Will Be Delayed and Refund Cycle Chart Discontinued

[GeorgeM]

IRS States Refunds Will Be Delayed and Refund Cycle Chart Discontinued

“When can I expect to receive my refund?” is the most frequently asked question of a tax preparer. This year your tax preparer may not be able to give you an answer. The IRS is not producing a 2013 IRS e-file refund cycle chart for tax preparers to answer the question. The commonly used chart has been discontinued and Publication 2043 has been dramatically revised due to IRS uncertainty about issuing refunds. The IRS states “In a change from previous filing seasons, taxpayers won’t get an estimated refund date right away.” From a customer service standpoint, this presents a problem in managing your clients expectations. The IRS states that “most taxpayers will have their refunds within 23 days”, a significant delay from recent years.

The delay in issuing refunds is due to a new processing method with an emphasis on fraud. The IRS’s new processing method includes multiple fraud checks based on the information in your tax return. Tax returns will be analyzed for what the IRS calls “Incoming transactions” and placed in a different category for funding. The IRS has not stated what denotes an incoming transaction but it could be anything from a change in dependents to a change in address. “The IRS has fraud filters built into their new system and they don’t truly know what category the tax returns will fall into based on the filters in place at the time of review and how many returns are going to be delayed. Those filters could change throughout the tax season” says Joseph Mahaffey, CPA. “The IRS’s priority has shifted from getting you your refund quickly to fraud prevention and identity theft.”

Tax preparer advocacy groups are displeased with the lack of information available to them by the IRS. The National Association of Registered Tax Return Preparers believes the taxpayer needs to know when to expect a refund and has taken action to provide NARTRP members with an answer. Based on extensive research of IRS and TIGTA reports of the new processing system, they have developed their own refund cycle chart to provide refund dates. President of the NARTRP, Andy Carter, remarks, “We think the IRS should not keep the tax preparer in the dark. Giving your client a date to put on the calendar is an important service provided by the tax preparer. A refund date manages your client’s expectations and prevents premature follow-up calls. We believe our refund cycle chart can accurately predict most refund dates.”

[Guest Taxed]

I think we have to tell our clients, what would they rather see happen to our system. The choices are a quick refund and possible fraud of over a billion dollars of OUR taxpayer money to crooks or a slightly delayed refund and significant reduction to fraud. Most of my clients would be OK with the second choice, but for those who were used to the RAL market for several years they will get a wakeup call. I have never done RALs ad have actually turned away business in previous years.

[ILLMAS]

This past tax season, the refund process was a disaster, after so many clients were calling me, "my refund is not here on the day you told me", now I cannot tell them something I don't know :)

[GeneInAlabama]

I don't do RALs either but I wonder how this will affect the RAL market. Will the IRS make some kind of allowance to appease the RAL market? RALs are too lucrative for them to just give up. If this does kill the RALs, it will help those of us who don't do them.

[mlinderEA]

There are no RALS they ended last year except for one bank who is not doing them this year.The only bank product is the client receives the money after the IRS makes a deposit.It is either direct deposited or the preparer prints a check.These people will have to wait like every one else.The pay day loan companies and any one else that loans money to low wage earners will have a field day.

[Medlin Software, Dennis]

I am answering many "how do I calculate 2013 paychecks" questions. The sad part is there is no official method for 2013 federal withholding published by the treasury department / IRS. Some might say since there is no calculations available, there is no withholding. One government employee was quoted by the APA as saying something similar to it would not be inconsistent to use 2012 calculations.

Since the T Dept has authority to issue calculations (as it did before the agreement was made last year) and has not, it could be the T Dept was asked to not do or say anything official. It is tough to think otherwise as their job, in this case, "IS" to issue instructions to make sure enough is withheld...