Taxpayers Could See Delays on Refunds

By Kelly McCarthy

February 6, 2013 Updated Feb 6, 2013 at 7:57 PM EDT

Binghamton, NY (WBNG Binghamton) The Internal Revenue Service could delay when taxpayers see their refund checks this year because of recent changes to the nation's tax laws.

Specifically, people should expect longer delays if they apply for certain tax credits.

The IRS is working to re-program its computer software to accept some credit forms that were changed by Congress.

Tax season is imminent when the snow is falling -- at least in the northeast. But this year, it could be close to spring before some people start seeing their refund checks.

"I really think it's going to make our March a lot busier than it normally is," said Margaret Duffy, Tax Return Preparer at Jackson Hewitt.

In the past, many would receive an exact date of when a refund check would be in the mail. But this year, those looking for certain credits are still waiting for their files to be accepted.

In addition to the IRS not accepting income tax returns before Jan. 30, a list of more than 25 tax forms are now delayed and can't be processed until mid-February.

"All they're saying is that you will get your refund sometime within 21 days within the acceptance of your return. So that's a big change for people," said Wendy Loomis, Owner of Loomis Tax Service.

Tax preparers are working to let customers know of the changes.

"This has never happened before. The changes and the delays on so many things has never happened before," Loomis said.

Offices in Loomis Tax Service got an updated list of all the tax delays last week. Since then employees have been making piles of folders that are completed, but can't be accepted yet by the IRS.

Loomis said out of the nearly 1,000 clients they see each year, the delays affect between 65 percent and 75 percent of them.

"I think the big thing with people is that they just want to know how much their refund is going to be," Duffy said. "And when they see how much of a difference that credit makes, they're willing to wait an extra week or a week and a half."

On the list of IRS delays are popular credits for things like depreciation and education.

Education credits can refund up to $2,500 per student.

"And that's a tax credit, not an adjustment to income. A tax credit. Very, Very, valuable," said Loomis. "That's money back. And if you have kids in college you need that money."

Preparers say the changes are no reason to delay having all paperwork ready to file. And they say they're not worried.

"So that we have time to go over everything and get it ready to file and then as soon as the IRS is ready, we are," Loomis said.

Said Duffy: "This is my 30th year of doing taxes, and I've seen just about everything."

Taxpayers have until April 15 to file their income tax returns.

Below are all of the forms as of Feb. 6 that cannot be processed by IRS e-filing:

Form 3800 General Business Credit
Form 4136 Credit for Federal Tax Paid on Fuels
Form 4562 Depreciation and Amortization (including information on listed property)
Form 5695 Residential Energy Credits
Form 5884 Work Opportunity Credit
Form 6478 Credit for Alcohol Used as Fuel
Form 6765 Credit for Increasing Research Activities
Form 8396 Mortgage Interest Credit
Form 8582 Passive Activity Loss Limitations
Form 8820 Orphan Drug Credit
Form 8834 Qualified Plug-in Electric and Electric Vehicle Credit
Form 8839 Qualified Adoption Expenses
Form 8844 Empowerment Zone and Renewal Community Employment Credit
Form 8845 Indian Employment Credit
Form 8859 District of Columbia First-Time Homebuyer Credit
Form 8863 Education Credits
Form 8864 Biodiesel and Renewable Diesel Fuels Credit
Form 8874 New Markets Credits
Form 8903 Domestic Production Activities Deduction
Form 8908 Energy Efficient Home Credit
Form 8909 Energy Efficient Appliance Credit
Form 8910 Alternative Motor Vehicle Credit
Form 8911 Alternative Fuel Vehicle Refueling Property Credit
Form 8912 Credit to Holders of Tax Credit Bonds
Form 8936 Qualified Plug-in Electric Drive Motor Vehicle Credit

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