IRS Says Tax Returns Could Be Delayed For Some

Monday, January 3rd 2011, 7:30 pm
By: News 9

Ed Murray, News 9

OKLAHOMA CITY -- The IRS is telling about 50 million taxpayers to not send in their returns for awhile. The agency said simply isn't ready to process them due to late action by Congress last month, which could mean tax returns could be delayed for some.

For those of that don't itemize and use the 1040 EZ form, officials said there should not be any problems. Tax payers should file those forms and get their refunds.

But the IRS was thrown a curve two weeks ago by Congress when lawmakers reinstated several deductions. So while the IRS updates its computers, taxpayers who itemize on Schedule A might have to wait for their refund.

The IRS will need anyone who claims deductions on Schedule A, the teacher out-of-pocket expenses, or tuition deductions on Form 8917 to wait until mid to late February to file.

"Everything is kind of put in a holding line until the IRS gets their computers programmed. We can't push it any quicker and get them their money any faster," said Sheryl Craig, H&R Block District Manager.

IRS spokesman David Stell said mailing it in anyway isn't going to work.

"If you send it in electronically, we're going to have something set up to where it will bounce back to you and say, 'I'm sorry. We can't process right now. You'll have to wait to file.' If you send in a paper tax return, we'll probably hold on to it until we can get ready to process them," Stell said.

But tax preparers said, tax payers can still at least get the paperwork out of the way now.

"What we can definitely do is still file their tax return in early February just like we always have in the past. Our software company will actually hold those returns until the IRS says it's clear sailing to actually e-file those," said Larry Heidebrecht, CPA/ Fleming Tax.

Craig said taxpayer should not let this set them back in getting their tax forms ready.

"Come in and see us because they might not even qualify to have an itemized deduction Schedule A form. In which case, if they have a 1040 EZ, we're going to be up and ready the minute the IRS opens which should be January 18," Craig said.

Basically it's the same for Online service TurboTax. It will also securely hold returns until the IRS is ready.

"On the other hand, if those deductions weren't reinstated, there wouldn't be a tax benefit for you this year and would increase you taxes," Stell said.

Stell said he expects the inconvenience should be minimal, only impacting about 100,000 of the estimated 1.5 million federal tax filers in our state. He also pointed out that most workers don't even get their W-2s until late January, so those that do itemize usually don't get started on their return until early February anyway.