IRS warns of delays if U.S. Congress fumbles tax 'extenders'

[October 08, 2014]  WASHINGTON (Reuters) - Severe delays and inconvenience for millions of taxpayers could result in 2015 if the U.S. Congress fails to deal soon with a list of temporary tax laws that expired at the end of 2013, the Internal Revenue Service and a key senator warned on Tuesday.

Known as the "extenders," the more than 50 expired tax laws are in limbo, waiting for Congress to decide whether to renew them or not. They range from tax breaks for multinational corporations to breaks for alternative energy and school teachers.

"The longer Congress delays action, the greater risk that the tax filing season and millions of taxpayer refunds will be delayed, among other serious disruptions," said Ron Wyden, the Democratic chairman of the Senate's tax-writing committee.

"As the economy begins to show signs of strength, uncertainty from the federal tax code is the last thing American businesses and families need," he said in a statement.

The extenders have been regularly renewed in past years. Wyden's committee in April approved legislation to keep the list of tax breaks alive through 2015, but the measure got bogged down in partisan squabbling earlier this year.

House of Representatives Republicans tried to remove some of the extender provisions and make them permanent one by one, rather than dealing with all of them in a single bill as is customary, but these attempts failed to win Senate support.

A post-election legislative session in November and December will be the next chance for Congress to consider the tax breaks.

In a letter to Wyden urging congressional action, IRS Commissioner John Koskinen said: "It is important that Congress decide whether or not to extend these expired provisions ... no later than the end of November."

He said the IRS is well into its preparations for the 2015 tax filing season, with continued uncertainty about the extenders presenting a complicating factor. "This uncertainty, if it persists into December or later, could force the IRS to postpone the opening of the 2015 filing season and delay the processing of tax refunds for millions of taxpayers," he said.

(Reporting by Kevin Drawbaugh; editing by Matthew Lewis)

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