March 1 has come, bringing with it the much talked about 'government sequester.'
The looming sequester has been a concern for taxpayers who have not yet filed their returns, including those who have been waiting on tax forms and tax credit delays. I last wrote about this topic in my February 15 post , providing guidance and insights to what could potentially happen.
With the sequestration now law, the across-the-board cuts to government agencies will soon start to go into effect. However, taxpayers received some very positive news from the IRS. The Acting IRS Commissioner, Steven Miller, has made the decision that there will be no furloughs, layoffs or reductions in IRS services or employees until after the end of filing season (April 15).
So what does the sequester and the IRS' announcement mean for the rest of the tax filing season -- and to YOU?
The current staffing levels at the IRS call centers, local Taxpayer Assistance Centers and the IRS back office operations, including those that review tax returns and maintain the IRS systems during the filing season, will remain the same. Taxpayers should not see a noticeable slowdown in refund processing or longer call waits than they are currently experiencing, other than the late season ramp up in a few weeks when the normal end-of-season crowds start to file.
But, it is still a good idea to file as soon as possible. You can get your refund earlier; don't have to pay (if you owe) until April 15, even if you file today; and lock your social security number, so that you (and your refund) do not become a victim of tax identify theft.
The downside of keeping staffing levels the same for the remainder of the tax season means there will be a harder hit to the IRS after April 15 in order for it to catch up with its required budget cuts. When sequestration begins at the IRS, it will be supersized. Yet, another reason to file sooner, and certainly by April 15.
If you are filing an extension, remember there will likely be less IRS staff to help until the entire issue of sequestration is managed. I will not start to discuss the federal debt limit and fiscal budget deadlines, but do look for future comments, from me, on what these topics will mean to your taxes.
During what is typically a quiet time in the tax season cycle, there are many new dynamics and nuances coming into play with the tax law changes, resulting in much confusion. If you have not filed your income tax return, you should do so now. The IRS is processing at full speed and will remain so, until April 15.