“Will my refund be delayed this year” is becoming an all too common refrain these days. Delayed e-filing dates, IRS not accepting tax forms & documents not being mailed out on time have all occurred over the last few years and have caused refund delays. However for the 2017 tax filing season (2016 tax year), it looks like we will get hit with all three of these scenarios at once:
Electronic Filing Start Date
Electronic filing has historically began around January 15th. However, over the past few years, these dates have been pushed back from a couple of days to a couple of weeks. This year is notable because as of time of this writing, the IRS has not even formally announced a beginning date to electronic filing! A commencement date is usually announced weeks if not months earlier. Therefore, it is a good bet to expect electronic filing to begin after 1/15 this year. We will post the official start date once the IRS releases it.
IRS Delaying Processing of Popular Tax Credits
The IRS has announced that the following tax credit forms will not be accepted for processing until February 15th, 2017:
Earned Income Tax Credit (EITC)
Child Tax Credit (CTC)
Additional Child Tax Credit (ACTC)
The American Opportunity Credit (AOTC).
This is a nationwide law change required by Congress in the Protecting Americans from Tax Hikes (PATH) Act; this is not a company or state change. If you normally file your taxes around this time (2/15/17), this delay should have a minimal impact on you. However, if you tend to file early and/or have plans for your tax refund in advance, R&G Brenner suggests that you prepare yourself accordingly. For example: if you rely on your refund for critical services (rent, utilities, etc), we suggest that you save some funds to carry you through any potential delays.
IRS Delays Form 1095 Distribution Deadline
The original deadline for distributing Form 1095-B and Form 1095-C to individuals was January 31, 2017. The new deadline is March 2, 2017. The extension provides Applicable Large Employers (ALEs), self-insured group health plans, and health insurance carriers more time to populate and distribute the forms. Since a final tax return cannot be filed without these health care related reporting, this too may delay the filing of your return and receipt of your refund.
These delays will affect taxpayers who claim popular credits & professional tax preparers the most as it may create a backlog and crush of appointments later on in the year. R&G Brenner suggests that you bring with you all supporting documentation for the above tax credits which will allow for the accurate preparation of your return and help minimize any potential delays.
The Deadline to file corporate tax returns (forms 1120, 1120A, and 1120S) is Monday March 16th, 2015. Most corporate returns are required to be filed electronically therefore they must be sent to the IRS before midnight on the 16th. If for some reason you are filing a paper corporate tax return, the post mark on the envelope must show 11:59pm or earlier in order to avoid late filing penalties.
If you require more time to file your corporate return, you can request a 6-month extension by filing federal Form 7004 and any corresponding state(s) extensions, however these too must be electronically filed or mailed before the March 16th Deadline.
The Internal Revenue Service (IRS) requires all employers to provide employees with a W-2 form, which lists the employee’s income information for the previous year. It doesn’t matter how long you worked for the company; if you earn more than $600, your employer must issue you a W-2. If any of your wages were withheld for Social Security or Medicare, the employer must issue a W-2 no matter how much you earned. Employers are required to provide you with this information by January 31 so that you can complete your tax return by April 15. Once you have your W-2 in hand, it’s time to get to know the form so you can be sure you don’t make any errors in reporting your income taxes.
What Each Box on the W-2 Means
When your W-2 arrives, check it to make sure that your social security number is listed correctly. The boxes on the left of the form should list your employer’s name and address, as well as your name and address. Directly below your social security number is your employer’s identification number. This number must be entered on your tax return.
Each of the boxes on the right side of your W-2 should have a number. Box 1 indicates the total salary you received, less any tax-exempt or tax-deferred benefits. This includes health insurance, dental insurance, retirement savings, and the cost of most other benefits that your employer deducts from your paycheck. Box 2 is the total amount of income tax withheld by the federal government. Box 3 indicates your total wages subject to the Social Security tax, including amounts not listed in Box 1. This number could be higher than the one in Box 1, because it’s calculated before payroll deductions. Box 5 indicates wages subject to Medicare taxes; since there is no cap for Medicare taxes and they generally don’t include any pretax deductions, this number might be bigger than the one in Box 3.
Boxes 4 and 6 indicate how much you paid for Social Security and Medicare taxes, respectively. The amounts are calculated based on a flat rate: 1.45% for Social Security and 6.2% for Medicare. That means that the numbers in Boxes 4 and 6 should be equal to the amounts in Boxes 1 and 3 multiplied by 1.5 and 6.2 Boxes 7 and 8 reported wages earned from tips; if you don’t report tips to your employer, these boxes will be empty. Box 9 actually no longer serves a purpose; the reporting requirement that made Box 9 necessary expired a few years ago, but the box has yet to be removed from the form.
If your employer paid any dependent care expenses on your behalf, you will see the total amount in Box 10. In Box 11, your employer lists any amounts distributed to you during the year from its non-qualified deferred compensation plan. Box 12 is pretty complicated, and involves entering different codes, only some of which are taxable. For a better explanation of Box 12, it’s best to go straight to the source and read what the IRS has to say about it. Boxes 13 and 14 will be filled out by your employer to indicate if you’re a statutory employee, if you participated in your company’s retirement plan or if you received sick pay from a third-party insurance policy.
Boxes 15 through 20 are information you need to file your state income tax return. This includes your state’s two-letter abbreviation, your employer’s state identification number, your income subject to state taxes (including that which is currently exempt from federal taxes), the amount of state income tax withheld from your paychecks last year, your local wages, local taxes, and the locality name where you paid them. It’s not common for figures to appear in the last three boxes.
What to Do if You Don’t Receive a W-2
If you haven’t received your W-2, make sure your employer mailed it to the correct address. If it was returned to your employer as undeliverable, request a new one and then wait until February 14. At this point you will need to contact the IRS and provide your full name and social security number, your employer’s complete address, your employer’s telephone number, and your estimated wages and tax paid for last year. If you haven’t received a W-2 by April 15, use Form 4852, Substitute for Form W-2, Wage and Tax Statement to file. Should you receive your W-2 after you have filed, use Form 1040X to send the correct information.
The only certainties in life are death and taxes, as the saying goes. Taxes are an annual event that, however unpleasant, we all have to deal with. It may interest you to know that according to the Internal Revenue Service (IRS), an estimated 239.3 million tax returns were filed in 2012 by individuals and businesses in the United States. That amount exceeded by a little more than 1% the number of returns that were filed in 2011, and by 2018 that number is projected to grow by almost 6% to 253.5 million tax filings.
What about those individuals who do not file a regular tax return? More importantly, what would be your fate if you did not pay your taxes in a timely manner? Below are some of the potential consequences that you may face for failing to file or pay your taxes in a timely manner.
Failure to File Penalty
Whether you owe taxes or expect a refund for a given tax year, it is important to provide the IRS with an informational tax return on or before April 15th of every year. When you miss the April 15th deadline you are subject to a penalty of 5% of the amount that you owe for each month you do not file. The penalty for failure to file can grow to 25% of the total unpaid amount. If you file a return 60 days after the due date of April 15th, you will be subject to a penalty of $135 or 100% of the unpaid tax liability, whichever is greater. This applies to both those expecting a refund and those who have taxes due.
Failure to Pay Penalty
In addition to the failure to file penalty that you face for missing the filing deadline, you are subject to a failure to pay penalty of half of 1% of the unpaid balance. This amount is assessed each month that your taxes go unpaid and is capped at 25% of the unpaid amount. Generally the failure to file penalty is higher than the failure to pay penalty. Filing a tax extension (Form 4868) on or before April 15th and paying some or up to 90% of the amount owed, as well as paying the balance in full by the extension deadline (typically 6 months or by October 15th), will help you avoid the failure to file and failure to pay penalties.
Loss of a Tax Refund
If you are owed a refund from the Federal government, filing a tax return by the deadline is the only way for you to ensure that the money will be returned to you in a timely manner. The IRS can hold a taxpayer’s refund for up to 3 years. After this time your refund is treated as a “gift” to the government and will remain in the treasury. This means that your failure to file could result in a generous donation of your tax refund to the federal government to do with as they please. Don’t let that happen…
Loss of Wages, Assets or Arrest
If you do not pay your taxes, the IRS will eventually come after you directly. There initial contact will be a letter informing you of your outstanding liability (or failure to file) with an opportunity to file an amended return. Ignoring this opportunity will result in a possible wage garnishment and even seizure of your assets, such as your home or car. If the amount of your tax liability is deemed by the IRS to be excessive you may be arrested and charged with tax evasion, subject to a fine of up to $100,000 and up to 5 years in prison.
Suspension Of Drivers License
Some states like New York are suspending the drivers licenses and/0r disallowing the renewal of licenses for those that have not paid their taxes. This recently went into effect in 2013. Expect more and more states (especially those with budget issues) to follow suit.
Not filing your taxes, or failing to pay them, is a serious concern and should not be taken lightly. If you need help filing your taxes, or you’ve missed a deadline and need to know what your next steps should be, don’t hesitate to contact an R&G Brenner professional tax preparer.
Going green isn’t just the next big thing—it’s the wave of the future. There is abundant information available about ways in which you can reduce your carbon footprint, save money and feel better about your role in the stewardship of this planet. Both federal and many state governments recognize the importance of energy savings and conservation and have provided tax breaks and incentives to businesses and individuals to encourage energy efficiency and going green.
Knowing what tax benefits may be available to you when you choose to go green may be enough to help you decide to start your own plan for energy conservation. There are certain tax breaks that are available just for businesses and others that individuals may take advantage of. Here is a discussion of green tax benefits and some of the tax breaks you may qualify for, either as an individual or as a business owner.
Tax Benefits Associated with Going Green
Tax benefits that are associated with going green can be classified as a tax credit, a rebate or savings in the cost of purchase. Tax credits are a dollar-for-dollar reduction of your overall tax bill—if you qualify for a $1000 tax credit, it means you owe $1000 less in taxes. There are also loan and grant programs that states offer to certain businesses that serve as an incentive to encourage the use of alternative energy and green certified building materials in new building construction and renovations.
If you choose to install an energy efficient solar hot water heater, solar equipment that generates electricity or even a wind turbine before December 31, 2016, you may be eligible for tax credits associated with these installations.
Green Tax Breaks for Individuals
Green tax breaks that are available for individuals come in the form of tax credits, rebates or upfront savings. Depending on your tax situation, you may choose a program that offers a tax credit in order to reduce your tax liability. If you have a need for income upfront, a rebate or savings incentive may be in order. The types of programs that are available vary from state to state, so it is a good idea to find information in your local area about incentives that may be available to you as a resident.
For example, residents (including commercial and industrial sector businesses) of the State of California may qualify for a property tax exclusion of up to 100% of the value of the installation of a solar energy system in a new building construction. Illinois residents may receive a special assessment to reduce their property taxes by registering qualified solar energy equipment on their property.
Green Tax Breaks for Businesses
Just as individuals are provided with breaks for going green, businesses may want to get into the act as well. The Tax Relief and Job Creation Act of 2010 helped to extend certain Federal energy tax benefits for businesses. These include tax credits for home builders, manufacturers and commercial buildings. There are also credits available to businesses that use vehicles that are hybrids, electric powered or use alternative fuels. Access to these green energy tax credits for business can be obtained through filing the appropriate form (such as Form 8908 and 8909).
Going green, either as an individual or as a business owner, isn’t just great for the environment, it’s great for your budget. There are numerous tax breaks and incentives available for using more energy-efficient vehicles, sustainable energy, and recycled building materials. Check with an R&G Brenner tax professional to see which tax breaks you might be entitled to.
Divorce can be a sensitive topic and a difficult period of time for all the parties involved. Whether you live in a common law or community property state, the process of filing taxes once the divorce has been finalized can be both emotional and complicated. Deciding how assets are split, the cost basis of these assets, new filing status and even which former spouse will claim children as dependents are all important considerations that go into the tax filing process after divorce. Here are 5 things to keep in mind when filing taxes after a divorce.
#1 Determine Which Taxpayer Will Claim Children as a Dependent
After 2009 a tax filer with shared custodial rights of a child or children must cede their claim for a tax exemption to the controlling ex-spouse by filing Form 8332. The significance of this filing should not be taken lightly. A custodial parent who is able to claim a child as a dependent is permitted a deduction of $3,900 on their tax return, which reduces their taxable income. This applies to all children living at home at least 6 months old up to age 19, or 24 if the child is a full-time college student.
#2 Determine Your New Tax Filing Status
A divorce will change a formerly married filing separately or joint filing status to single, regardless of when the divorce was finalized within the tax year. Also consider that if you want to file as head of household, you will have had to have lived apart from your ex-spouse for at least six weeks and contribute more than half of the money to support the household. Being able to file as head of household can result in a bigger tax savings, so review your situation–or have and experienced tax professional review your situation–carefully.
#3 Understand the Impact Alimony Will Have Upon Divorce
Alimony may be necessary as a source of income for a divorcing spouse that has either stopped working, is returning to the workforce or is making significantly less than the other spouse. Be careful, however, as alimony payments made from one spouse to another are considered taxable income to the recipient spouse. Depending on your income level, if you are the one receiving alimony from your former spouse, the additional income could affect your tax bracket potentially pushing you into a higher bracket and a bigger tax liability.
#4 Understand the Impact of Dividing Assets Upon Divorce
There are some tradeoffs that come when assets are divided, particularly a home. Gains that may have been subject to exemption as a result of a sale, for example, would be halved if the asset is sold under a divorce decree. The spouse who receives the home as part of the divorce settlement (if a sale is not ordered) will have the ability to claim the mortgage interest deduction. Discuss with a tax professional carefully how the receipt or sale of certain assets will show up on your tax return and what tax benefits or disadvantages you will receive or give up.
#5 Understand How Divorce Will Affect Your Retirement Plan
Many times divorce results in the splitting up of retirement assets held by a working spouse, such as those held in an IRA or 401(k). Be sure to secure what is known as a qualified domestic relations order (QDRO) in order to secure treatment of these assets as your personal retirement assets and not those of your former spouse. Failure to do so could result in disastrous tax treatment once those assets pass from one spouse to another, such as in the case of death.
It’s important to take all the details of a divorce into account when filing your taxes. If you have questions about what you are entitled to and how your tax status is changing after a divorce, don’t hesitate to contact an experienced R&G Brenner tax professional.
IRS audits are feared for good reason: at best, they’re disruptive, and at worst they can cost you vast amounts of money. Though the percentage of audited returns is relatively low, every year the IRS still audits a huge number of returns. Following these tips can help you reduce the chances you’ll end up as one of their targets.
Be Diligent With Business Deductions
This primarily pertains to the self-employed and business owners. While it may be tempting to write off your apartment as a home office or your car as a business investment, the IRS has careful formulas for determining whether or not particular expenses are deductible. For instance, only the part of your home used exclusively counts towards the home-office deduction—meaning writing off too much square footage could get you noticed. Car expenses, likewise, must be carefully calculated. If you’re thinking of writing something off, you should do some research or contact a tax professional.
No, not “everything” as in money. “Everything” here means documentation, like receipts, pay stubs, leasing agreements—really, anything that might be slightly relevant during tax time. Tax returns gets much more difficult to complete when you’re missing documents–and complications could lead to you miscalculating a deduction or forgetting to declare an income source. And, in the unfortunate event of an audit, you will need all of your documentation to verify your deductions.
Choose Your Professional Wisely
Many people, especially those with complicated tax situations, hire tax professionals to help take the headache out of tax season. But according to MSN Money, choosing the wrong tax “pro” can be disastrous. So, when picking a tax preparer, check out their track record, customer reviews, how long they’ve been in business, their Better Business Bureau standing—just do your homework, as you would when hiring any other type of professional. R&G Brenner currently has an A+ Rating with the BBB
Pay Quarterly Taxes (If Necessary)
If you’re self-employed, the IRS expects you to keep up with your tax obligations throughout the year. This means not only filing an annual return, but also paying quarterly taxes if a certain proportion of your income comes from self-employment. It’s especially vital for the self-employed to keep up with their taxes because they have no employer withholding income taxes or chipping in on Medicare and Social Security taxes. Some tools you can use to keep up with your quarterly taxes are Form 1040-ES, which can help you determine if you need to pay quarterly taxes, and the Electronic Federal Tax Payment System, which you can then use to pay quarterly taxes.
Depending on the system you use, electronic filing (e-filing) can have several advantages: less paperwork cluttering your desk, easy deduction-tracking systems, built-in calculators, and so on. But perhaps the biggest advantage is that, according to the IRS, e-filed returns have an error rate of only 1%, compared to 20% for paper returns. And if there is an error, e-filed returns can report back to the sender much more quickly, hopefully allowing them to correct the problem. Furthermore, the IRS & states like NY require all tax returns to be e-filed unless you have a legitimate excuse for not filing electronically. If they don’t like your excuse, they can fine you.
Although the Earned Income Tax Credit (EITC) can sound daunting and confusing for taxpayers and tax professionals alike, there are ways to navigate the murky waters of this credit to maximize its benefits. This tool can be important for low- and middle-income families and singles looking to save money where they can. Breaking down this tax credit isn’t difficult once you understand what it is and how to file for it.
What is the EITC Credit?
Approved in 1975 by Congress, The EITC is a refundable federal income tax credit designed primarily for low- to middle-income working people to not only mitigate the burden of paying taxes for social security but also to give singles and families an incentive to work. The individual who qualifies for the EITC receives a tax refund, according to the Internal Revenue Service (IRS). Basically, the EITC increases a taxpayers refund by 100% of the value of the credit. What exactly is earned income? Well, this includes all taxable income a person gets from working or obtains through payments for disability. Broken down in more detail, it includes any income received from salaries, tips and pay; benefits as a result of a union strike; long-term disability pay before the age of retirement; and net earnings from being self-employed.
Do I Qualify?
Taxpayers are required to meet certain requirements to be able to take advantage of the EITC. They must file a tax return even in the event they don’t owe taxes. If you don’t owe taxes, you don’t need to file a tax return typically, but to qualify for the credit you must file either way. The money you have earned must have come from gainful employment by someone else or through self-employment, plus it must meet rules set forth by the IRS. There are also additional rules for workers who do not have a qualifying child or do not have a child meeting those rules for them. In general, EITC rules state that:
you must have a valid social security number
you must currently be receiving income from some source, whether through someone else or self-employment
must file as married filing jointly
you must be a U.S. citizen, resident alien for the entire year, or a nonresident alien who is married to someone who is a U.S. citizen or resident alien.
Further rules state that you can’t be a qualifying child for someone else, you can’t file Form 2555 or 2555-EZ, you must meet certain gross and earned income limits, and income from your investments must not exceed certain stated limits. The IRS lists all the restrictions and EITC qualifications on its website. Keep in mind there are special rules that apply to the military, clergy members, those getting disability payments, and those affected by natural disasters.
WASHINGTON — The Internal Revenue Service today announced plans to open the 2014 filing season on Jan. 31…
The new opening date for individuals to file their 2013 tax returns will allow the IRS adequate time to program and test its tax processing systems. The annual process for updating IRS systems saw significant delays in October following the 16-day federal government closure.
“Our teams have been working hard throughout the fall to prepare for the upcoming tax season,” IRS Acting Commissioner Danny Werfel said. “The late January opening gives us enough time to get things right with our programming, testing and systems validation. It’s a complex process, and our bottom-line goal is to provide a smooth filing and refund process for the nation’s taxpayers.”
The government closure meant the IRS had to change the original opening date from Jan. 21 to Jan. 31, 2014. The 2014 date is one day later than the 2013 filing season opening, which started on Jan. 30, 2013, following January tax law changes made by Congress on Jan. 1 under the American Taxpayer Relief Act (ATRA). The extensive set of ATRA tax changes affected many 2012 tax returns, which led to the late January opening.
The IRS noted that several options are available to help taxpayers prepare for the 2014 tax season and get their refunds as easily as possible. New year-end tax planning information has been added to IRS.gov this week.
In addition, many software companies are expected to begin accepting tax returns in January and hold those returns until the IRS systems open on Jan. 31. More details will be available in January.
The IRS cautioned that it will not process any tax returns before Jan. 31, so there is no advantage to filing on paper before the opening date. Taxpayers will receive their tax refunds much faster by using e-file…with the direct deposit option.
The April 15 tax deadline is set by statute and will remain in place. However, the IRS reminds taxpayers that anyone can request an automatic six-month extension to file their tax return. The request is easily done with Form 4868, which can be filed electronically or on paper.
IRS systems, 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.
The October 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 is a complex, year-round process with the majority of the work beginning in the fall of each year.
About 90 percent of IRS operations were closed during the shutdown, with some major work streams closed entirely during this period, putting the IRS nearly three weeks behind its tight timetable for being ready to start the 2014 filing season. There are additional training, programming and testing demands on IRS systems this year in order to provide additional refund fraud and identity theft detection and prevention.
The IRS is accepting 2013 Business Returns (Forms 1120, 1120S, 1065, 1041, 720, 940, 941, 2290) for filing January 13th, 2014.
President Obama–through Treasury Secretary Jacob Lew–forced acting IRS commissioner Steven Miller to tender his resignation today following the recent disclosure that the IRS actively and unfairly targeted conservative and Tea Party groups applying for tax exempt status; a gross violation of a government body that is supposed to be above the political fray.
The outrage has now reached a fevered pitch, with the FBI now getting involved with the investigation. While the President and his administration appears to be insulated from the fall out thus far, criminal charges may be forthcoming, with a key person of interest being Lois Lerner who is in charge of the Tax Exempt division of the IRS:
“Lois Lerner lied to me,” said Representative Jim Jordan, Republican of Ohio, who helped initiate the Congressional investigation of the I.R.S.
Ms. Lerner knew of the increased scrutiny given to Tea Party groups since 2010, but told reporters last Friday that she was not aware of any additional scrutiny given to any group and only heard about this through media reports. She along with many other IRS employees are expected to be called in front of congress shortly:
The House Oversight Committee requested five senior I.R.S. officials be made available for interviews by May 20, including the director of rulings and agreements, Holly Paz; a former screening group manager in the exempt-organizations determinations division, John Shafer; and a former advocacy group manager, Joseph Herr.
“Potentially dozens of I.R.S. employees are involved with the original targeting, the failure to correct the problem and the failure to promptly report the truth to Congress and the American people,” said Meghan Snyder, a spokeswoman for Mr. Jordan.
While Mr. Miller–and what is sure to be others–has taken the fall for this scandal, one can’t help but think what involvement if any the previous IRS Commissioner Douglas Shulman had. Mr. Shulman had been commissioner since May 2008, and just recently stepped down last November. He oversaw an aggressive agenda that made some of biggest changes the IRS has seen in decades. While initially lauded, many of these changes have been riddled with delays, errors and met with contempt.
Mr. Shulman was integral in developing and integrating a universal licensing and annual continuing education requirements for professional paid tax preparers. But these requirements were halted by a federal judge right before the 2013 tax season began citing that the IRS did not have the authority to implement these requirements. The IRS appealed part of the decision, but again were overruled. With millions of dollars already spent and industries spawned to provide these paid preparer requirements, it seems like a foregone conclusion that eventually they will go into effect; either by appealing the decision or by going through a body that does have the authority to regulate the industry. Nevertheless, this new scandal will only serve to divert more time & energy away from this project, ultimately leaving the consumer to suffer the most.
Furthermore, Mr. Shulman led the charge in “modernizing” the IRS; particularly the Modernized E-File Program (MeP). With the new MeP, taxpayers would get their refunds in a matter of days, not weeks; all while being kept abreast of their entire filing process with faster updates. The only problem was that it didn’t work. The MeP was put into effect for the 2012 tax season. When it became clear that the MeP was not functioning, it was scrapped, and the IRS was forced to go back to their old E-File program for the remainder of the 2012 tax season. This year (2013) the IRS fully replaced the old program with the MeP, but the tax season was already riddled by delays, due to the last minute fiscal cliff negotiations. At first, the MeP was working as advertised: refunds were being released quicker, and the IRS even claimed you could get updates on refund statuses every 24 hours. But since then its been glitch after glitch, culminating in what has been dubbed the “Education Credit Debacle“, where the IRS allowed hundreds of thousands of tax returns with IRS form 8863 to be filed early causing serious delays. Some of the affected taxpayers could not even get verification that their returns were filed! And the problems haven’t stopped yet. As of the writing of this post, many taxpayers who filed in February & March still have not received their refunds and the IRS is offering no explanation. Last but not least, the new MeP has done next to nothing to combat the explosion of Identity Theft and Fraud that plagued the IRS is recent years.
Once again, it is the hardworking taxpayer that is getting the short end of the stick. If we don’t file our taxes on time, penalties, interest, garnishments, liens, levies, etc. can be and are assessed. But what happens when the IRS does not live up to it’s end of the bargain? As of now, it appears nothing. Supposedly the IRS must pay interest after a certain date if they do not release refunds, but that date is not static. All the IRS has to do (and has done) is send a “document request” like requesting a copy of your W-2s…EVEN THOUGH THE IRS ALREADY HAS ACCESS TO THAT INFORMATION. I have yet to see a taxpayer actually receive interest from the IRS. And the interest rate they supposedly give is far less than what IRS charges us if we are late.
While there is sure to be more to come out from this story, the politicization of it is not good news for anyone. Some politicians have been searching for a scandal ever since Obama took office. So now that they have one, how will it play out to a public so tired of other “scandals”? It’s the “Boy Who Cried Wolf” syndrome. And that is the crux of the problem. While our elected officials have their hearings, while IRS employees start losing their jobs, and the midterm campaign season heats up, average American taxpayers of all stripes, creeds and political affiliations are ultimately the ones that are being ignored.
Do you have an IRS horror story? Share it with us in the comments section.