The Star-Ledger

Delayed Start To Tax Season No Reward To Early Filers, Accountants

The Star-Ledger — Sunday, February 17, 2013

By Ed Beeson / The Star-Ledger

For many early tax filers, that refund check is coming a little later this year.

It's all thanks to the congressional wrangling over tax reform that kicked off 2013. Because of the last-minute compromise that led to the American Taxpayers Relief Act of 2012 — the law that kept the U.S. from falling off the so-called fiscal cliff in January — the Internal Revenue Service was forced to rush a number of unexpected fixes to its forms and internal systems to reflect the changes in tax code.

As a result, the agency had to push back the official start of tax season eight days to Jan. 30. It also had to delay accepting some common tax forms until last week, and it won't take some others until early March.

The delay aren't a problem for most federal taxpayers — of which there will be around 152 million individual filers across the U.S. this year, and 4.4 million in New Jersey, according to the IRS. But low-wage workers who depend on early refunds are feeling the brunt, along with some students, small businesses and those who simply hate to procrastinate, accountants and others say.

The late start of tax season has kept New Jersey Citizen Action, which prepares returns for low-income workers as part of the IRS's Volunteer Income Tax Assistance program, from helping the roughly 300 filers it usually sees during January, said Crystal Eshanov, the program's coordinator. One client was even reduced to tears because she couldn't complete her return until the IRS began accepting a form for education tax credits last week, she said.

"It just added more stress," Eshanov said of the delays.

The accountants feel it, too. Not being able to file forms has forced some work to come to a standstill as they wait for the IRS's gates to open. And when that happens, the simultaneous rush of returns often bogs the agency's systems, they said.

"It just creates a big crunch," said Paula Vuksic, parter with Citrin Cooperman in Livingston.

Early filers got some relief last week when the IRS began allowing two forms commonly used by businesses and individuals, respectively. On Monday, the agency gave the green light to Form 4562, which is used to claim a deduction for depreciation and amortization of certain business costs. Then on Thurday, it said OK to Form 8863, which allows students or their families to claim thousands of dollars in education credits.

Nearly 30 other tax forms won't be available until the beginning of March, but for the most part, they aren't common forms. Many are credits for energy efficient homes, appliances and vehicles. One is used to report income from Guam, while another is used to collect a benefit for undergoing mine rescue training.

But a handful of these tax forms are commonly used by smaller businesses, accountants say. This includes Form 3800, which provides credits for general business expenses, and Form 6765, which is used to claim a benefit for research and development. The delayed acceptance date could put some corporate filers in a pinch because, unlike individuals, they only have until March 15 to file, noted William Schwarz, tax partner with Meisel Tuteur & Lewis in Roseland.

Another congressional action this year has impacted filing season for Hurricane Sandy victims.

In its version of the eventual $50.5 billion relief bill, the U.S. Senate had sought to allow deductions on all uninsured and unreimbursed Sandy losses, noted Len Nitti, tax manager with Wilkin & Guttenplan.

But the House of Representatives knocked that provision out, he said. As a result, Sandy victims can only claim a deduction for losses above 10 percent of their adjusted gross income.

Top Top | NJCA Homepage | NJCA in the News