Taxes: Refunds Maybe Delayed but Less Audits are Predicted
Significant budget cuts at the IRS are likely to affect many taxpayers this tax season. The IRS expects that the budget cuts, which started in 2010, will put over 17,000 IRS workers out of a job before they are finished. It is estimated that, this year alone, the IRS will see 3,000 to 4,000 employee cuts before June. On the negative side, these cuts may result in delayed tax refunds and will make IRS workers less available to communicate with individuals and business owners who have questions. This may lead to a frustrating tax season for those who need assistance. On the positive side, however, the budget cuts should mean that fewer resources are available for audits, and collection activities.
IRS Commissioner John Koskinen recently announced that, due to the budget cuts, people who file paper returns may have to wait an extra week (or possibly longer) for their refund. Although the IRS has said that most refunds will be issued within 21 days, they have cautioned that people filing paper returns could have to wait as long as seven weeks to get what they are due. This is longer than the four to six week wait time which is the average time for a paper return refund in a normal tax year. The most important tax advice on this matter is to make sure that a return is filled out correctly before it is filed. A return submitted with errors can cause a significant processing delay and may even flag that return for an IRS audit.
Fear and apprehension usually begin to take over upon receipt of an IRS Notice of Intent to Audit. However, the reduction in IRS staff due to the budget cuts should result in fewer returns being selected for further examination. It is probable that this reduced percentage will apply to both individual and business tax returns. However, in spite of the fact that fewer returns will be selected to undergo the audit process, it is always advisable to avoid those things might cause a return to be selected for closer examination. Some of the more common audit red flags are discussed in the following article: http://professionaltaxresolution.com/blog/avoiding-irs-tax- . In addition to a reduction in audit department employees, the budget cuts will almost certainly result in a reduction in the number of collection and enforcement personnel. However, as with audits, it is wise to avoid these services altogether by meeting tax filing deadlines and avoiding the accumulation of a back tax balance.
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