Fiscal Times: Tax Return Filing Could Be Delayed Due to Fiscal Cliff

Friday, 21 Dec 2012 11:27 AM

By John Morgan

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Government gridlock and a blizzard of regulatory requirements from Obamacare may be threatening the ability of the IRS to do an accurate job.

Steven Miller, acting IRS chief, told Congressional tax writers that 80 million to 100 million taxpayers would be forced to file late returns next year if fiscal cliff negotiations between the White House and GOP leaders in Congress are not resolved quickly.

That’s because the IRS has programmed its computers to assume Congress will agree to last-minute alternative minimum tax relief, according to The Fiscal Times. If no relief is agreed upon, millions of Americans would have to wait while the IRS adjusts its programming.

Editor's Note: Use This Single Loophole to Pay Zero Taxes in 2013

While many taxpayers rely on the money they receive from tax refunds, Miller said fiscal cliff snafus could mean the first day of e-filing for most Americans will be pushed back from January to March.

The delay, according to The Times, could impact consumer spending, as billions of dollars in refunds that normally enter the economy in the first quarter would be curtailed.

Reuters reported the IRS might have until mid-January to implement the alternative minimum tax patch and still start the tax season on time, if Congress approves the fix, said Richard Harvey, a tax professor at Villanova University and a former IRS official.

The IRS has already endured a series of “embarrassing administrative snafus and tough budget cutbacks that have forced the agency to do considerably more work with fewer resources,” according to The Times.

Meanwhile, the newspaper reported, some experts worry about the ability of the IRS to implement key provisions of the Affordable Care Act next year.

The IRS has already put out over 200 pages of guidance on new healthcare-related taxes that will take effect in January. The agency is charged with both enforcing the new law and managing tax credits to help individuals and businesses pay for insurance.

“I think the bottom line is [the IRS] will be subject to a tremendous amount of improper payments, fraud and lack of accountability,” said Scott Hodge, president of the Tax Foundation.

“The solution is not to give the IRS more money and more manpower, it’s to take responsibilities off its shoulders so that it can focus on what its core mission is, and that’s simply to collect revenues, not manage social programs.”

Editor's Note: Use This Single Loophole to Pay Zero Taxes in 2013

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