For the 5.5 million Ohioans who filed 2011 federal income taxes, the Internal Revenue Service [IRS] announced Monday that they can expect a delay of approximately one to two weeks to the start of the 2014 filing season to allow adequate time to program and test tax processing systems following the 16-day federal government closure.
The IRS said in a media release today that it is exploring options to shorten the expected delay and will announce a final decision on the start of the 2014 filing season in December. Acting IRS Commissioner Danny Werfel said That the original start date of the 2014 filing season was Jan. 21, and with a one- to two-week delay, the IRS would start accepting and processing 2013 individual tax returns no earlier than Jan. 28 and no later than Feb. 4.
The government closure came during the peak period for preparing IRS systems for the 2014 filing season. Programming, testing and deployment of more than 50 IRS systems is needed to handle processing of nearly 150 million tax returns. Updating these core systems, officials said, is a complex, year-round process with the majority of the work beginning in the fall of each year.
Estimates are that about 90 percent of IRS operations were closed during the shutdown, with some major workstreams closed entirely during this period. The shutdown put the IRS nearly three weeks behind its tight timetable for being ready to start the 2014 filing season, but additional training, programming and testing demands on IRS systems this year in order to provide additional refund fraud and identity theft detection and prevention remain.
"Readying our systems to handle the tax season is an intricate, detailed process, and we must take the time to get it right," Werfel said, adding that the adjustment to the start of the filing season provides the agency necessary time to program, test and validate systems so it can provide a smooth filing and refund process for the nation’s taxpayers.
"We want the public and tax professionals to know about the delay well in advance so they can prepare for a later start of the filing season," he said.
Werfel oversees an agency, not beloved by many but critical to others, that collects approximately $2.4 trillion in tax revenue each year, which funds most government operations and public services. Mr. Werfel manages an agency of about 90,000 employees and a budget of more than $11 billion.
Ohio IRS stats
Based on the most recent IRS adjusted gross income [AGI] figures for Ohio, there were 6,503 returns filed in 2011 with AGI $1 million or more, compared to the 2,231,337 returns filed by Ohioans whose income ranged as high as $25,000 per year.
Ohio returns for other AGI categories:
$25,000 to $50,000: 1,392,314
$50,000 to $75,000: 773,414
$75,000 to $100,000: 456,486
$100,000 to $200,000: 463,677
$200,000 to $500,000: 97,640
$500,000 to $1,000,000: 16,001
April 15 remains by statute
The IRS announced it will not process paper tax returns before the start date, which will be announced in December. As such, it said there is no advantage to filing on paper before the opening date, and taxpayers will receive their tax refunds much faster by using e-file with direct deposit.
Meanwhile, the April 15 tax deadline is set by statute and will remain in place, but the tax collection agency reminds taxpayers that anyone can request an automatic six-month extension to file their tax return by filing Form 4868, which can be filed electronically or on paper.
IRS processes, applications and databases must be updated annually to reflect tax law updates, business process changes, and programming updates in time for the start of the filing season.
What do the numbers look like after a 16-day closure? Not pretty, if estimates are correct that the IRS received 400,000 pieces of correspondence, on top of the 1 million items already being processed before the shutdown.
"In the days ahead, we will continue assessing the impact of the shutdown on IRS operations, and we will do everything we can to work through the backlog and pent-up demand," Werfel said. "We greatly appreciate the patience of taxpayers and the tax professional community during this period."
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