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Tax Refunds May Be Delayed by Government Shutdown

Trey Thoelcke

It looks like tax refunds could be delayed by a week or more due to the recent government shutdown. The Internal Revenue Service (IRS) now says it will not begin processing returns until January 28, at the soonest, possibly not until February 4. The planned start date had been January 21.

That all could be pushed back even further, should budget negotiations break down again by the end of the year, forcing the government to shut down once more.

The IRS says it needs more time to program and to test its tax-processing systems because the government shutdown came during the peak period for preparing those systems for the filing season. The IRS has more than 50 systems to handle processing of nearly 150 million tax returns. Nearly all IRS operations ceased during the shutdown, putting the agency nearly three weeks behind its tight timetable for being ready for filing season.

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"Readying our systems to handle the tax season is an intricate, detailed process, and we must take the time to get it right," according to acting IRS Commissioner Danny Werfel.

However, taxpayers still must file their returns by April 15, and companies still must send W-2 and other tax forms on schedule, generally by January 31.

"In the days ahead, we will continue assessing the impact of the shutdown on IRS operations, and we will do everything we can to work through the backlog and pent-up demand, " Werfel also said in the IRS statement. "We greatly appreciate the patience of taxpayers and the tax professional community during this period. "

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