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19 Dec, 2014 16:47

IRS: Americans should expect delays in tax refunds this year

IRS: Americans should expect delays in tax refunds this year

Budget cuts at the Internal Revenue Service will likely delay tax refunds, hinder taxpayers services, and hamper enforcement efforts, according to IRS Commissioner John Koskinen.

Koskinen said during a press conference before the beginning of tax-filing season that about half of people who call the IRS for assistance with their taxes will not be able to reach an employee, based on staffing levels. Fewer agents will mean slower auditing, leading to later refunds than in past years.

"Everybody's return will get processed," Koskinen said, according to AP. "But people have gotten very used to being able to file their return and quickly getting a refund. This year we may not have the resources, the people to provide refunds as quickly as we have in the past."

READ MORE: IRS head warns of 'miserable' 2015 tax-filing season

The IRS says that in recent years it has been able to offer tax refunds within three weeks after electronic filing. Refunds averaged about $2,800 this year.

Yet budget cuts will prolong that period, Kosinen said, as the IRS has instituted a hiring freeze and eliminated most overtime.

The IRS budget was cut by $346 million for the fiscal year that ends in September 2015. The $10.9 billion budget is $1.2 billion less than the agency was allotted in 2010, according to AP.

Conservatives in Congress have worked to cut IRS funding in order to weaken implementation of the Affordable Care Act, known as Obamacare. Thanks to the law, taxpayers will have to report on their tax returns whether or not they have health insurance and if they receive tax credits to help pay insurance premiums.

Yet Kosinen said political games with the IRS funding won’t have the intended effect, as the agency must enforce the law meaning that other areas, like taxpayer services and enforcement, will suffer.

"In some ways, these budget cuts are really a tax cut for tax cheats," Koskinen said.

"Because to the extent we have fewer people to audit and enforce the tax code, that means some people cutting corners on their taxes or not complying are going to get away with it, and that is a decision that Congress has made."

READ MORE: IRS seizes hundreds of perfectly legal bank accounts, refuses to give money back

Colleen M. Kelley, president of the National Treasury Employees Union, which represents IRS employees, warned that funding cuts will mean "correspondence will continue to pile up and taxpayers will wait longer and longer for a response."

"Starving the IRS hurts more than just the agency's workforce, it hurts all taxpayers," Kelley said.

Koskinen had previously expressed dismay over what awaits taxpayers and the IRS next year.

The 2015 tax filing season “will be one of the most complicated filing seasons we’ve ever had,” Koskinen cautioned last month at the American Institute of Certified Public Accountants National Tax Conference in Washington, DC. “All we can do is try to maximize our services as well as we can; as well as we can is still going to be miserable. You really do get what you pay for.”

The tax-filing season will begin on time next month, Koskinen said, though the IRS has yet to set an exact date based on last-minute tax legislation passed by Congress this month.