The big national tax prep chains reacted to the Internal Revenue Service’s
announcement that tax season would be delayed until the end of the month with a
mixture of statements ranging from acceptance to resignation to the equivalent
of “I told you so.”
The IRS said Tuesday that the start of tax season for individual returns
would be postponed until January 30, with some tax returns unable to be
processed until late February or March (see
IRS Delays Tax Season until End of January).
The biggest tax chain, H&R Block, noted that the January 30 start for
processing federal income tax returns was eight days later than originally
planned. Not one to lose business because of a minor thing like an IRS delay,
however, Block cautioned that this does not mean taxpayers have to delay
preparing their tax returns. “Whether taxpayers prepare in one of H&R
Block’s 11,000 tax offices or use our At Home product, they can prepare their
returns now and we will hold them until the IRS is ready to begin processing,”
said the chain.
“While the IRS indicated some forms may be delayed, the majority of
taxpayers can begin the filing process now. By preparing the tax return with
H&R Block now, taxpayers can have confidence they’ll get their tax refund
as fast as possible,” said Kathy Pickering, executive director of The Tax Institute
at H&R Block.
According to IRS data, approximately 18 million total taxpayers typically
file a tax return in January with 98 percent of those receiving a refund, Block
noted. “With refunds now coming several weeks later, those who can afford it
the least are impacted the most,” Pickering said.
To ensure timely processing of the return and refund delivery, H&R Block
recommended that taxpayers still prepare their return as they normally would.
Like Block, Jackson Hewitt also urged taxpayers to start early, despite the
IRS delay.
“Despite the new filing date, taxpayers can—and should—start having their
tax returns prepared,” said the company. “Jackson Hewitt Tax Service now has
thousands of locations open around the country to assist taxpayers in answering
their questions and preparing their returns. Approximately 18 million taxpayers
file in January.”
“Although unfortunate and burdensome for millions of taxpayers, this IRS
delay does not impact our readiness or our ability to work with our clients,”
said Jackson Hewitt president and CEO Philip H. Sanford. “In fact, the delay,
which is one of many complexities resulting from the recent fiscal cliff
negotiations, points to how this year is even more challenging than years past.
Now more than ever is the time to work with an experienced tax preparer to
navigate the many changes and ensure every taxpayer makes the most of those
changes.”
Jackson Hewitt insisted that its systems and software are all up to date,
even though the IRS had just announced that its own systems were not. “Those
who are ready to begin the filing process can stop by their local Jackson
Hewitt, begin their return, determine the amount of refund owed to them and
select how they prefer to receive their refund and have everything finalized for
the IRS acceptance date,” said the company. “The IRS anticipates that nine out
of ten refunds will be issued again this year in less than 21 days, and even
with the delay for filing until January 30, the sooner taxpayers file their
returns, the sooner they will get their refunds. “
Most taxpayers will be able to file their returns on January 30, including
taxpayers who itemize deductions and claim the sales tax deduction, Jackson
Hewitt noted, although that might make its offices a little bit crowded.
However, the company acknowledged that taxpayers who claim an energy credit,
depreciation or business credits would be delayed until late February.
For its part, Liberty Tax Service recycled excerpts from a news release it
issued last Friday, correctly predicting that tax season would be delayed (see
Fiscal Cliff Law May Delay Tax Season, Liberty Warns). The
new release included the same quote from CEO and founder John Hewitt, who had
earlier co-founded Jackson Hewitt and was a former Block executive. “This has
been an epic beginning to tax season 2013,” Hewitt reiterated. “I’m starting my
44th tax season looking at the worst delays in filing I have ever seen.
Fortunately, we have the most experienced management team of any tax
preparation company and are ready to navigate these rough waters.”
Liberty acknowledged that the IRS’s announcement meant that the vast
majority of tax filers—more than 120 million households—should be able to start
filing tax returns starting January 30. However, it added, “to further
frustrate the situation, refunds could be delayed to mid to late February.”
“Due to the last-minute tax law changes made by Congress under the American
Taxpayer Relief Act (ATRA), the IRS has scrambled to update forms and make
critical programming changes to its processing systems,” Liberty explained.
“They also anticipate that the remaining taxpayers will be able to start filing
in late February and early March because of the needed changes on the more
extensive forms and processing systems. The IRS provides a full listing of the
forms that are currently not being accepted on their web site: IRS.gov.
“Liberty Tax is staying in contact with the IRS to keep abreast of the
release of these updated forms. And we are fully prepared to move forward and
help our customers get their money as quickly as possible," said
Hewitt.
Throwing cold water on Block and Jackson Hewitt’s insistence that taxpayers
stop by anytime to get their tax returns prepared, Liberty noted that the IRS
emphasized that there was no advantage to filing on paper before January 30.
The company reiterated that taxpayers would receive their tax refunds much
faster by e-filing their return. More than 80 percent of taxpayers filed
electronically last year.
Liberty said it would be “working alongside the IRS to help the American
people with the delays this tax season and to ensure they receive the most
current and accurate tax assistance.”
The IRS could have used some of that timely help from lawmakers in Congress
who waited until the last possible minute—plus about 24 hours beyond that—to
finally pass the fiscal cliff legislation setting the tax rates, patching the
AMT and extending the expired tax breaks.
IRS Circular 230 Disclosure
Pursuant to the requirements of the Internal Revenue Service Circular 230, we
inform you that, to the extent any advice relating to a Federal tax issue is
contained in this communication, including in any attachments, it was not
written or intended to be used, and cannot be used, for the purpose of (a)
avoiding any tax related penalties that may be imposed on you or any other
person under the Internal Revenue Code, or (b) promoting, marketing or
recommending to another person any transaction or matter addressed in this
communication.
