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The
number of people filing their taxes with the Internal Revenue
Service is running well below last year. The number of returns
received by the agency was off 8.5 percent from Jan. 23 through
March 3. And refunds were down 7.1 percent in dollar terms
(http://bit.ly/2mCcpv8).
These numbers are usually flat year to year, so a significant
drop in tax filings means something unusual is going on.
One simple reason is a fluke of the calendar. The tax deadline
is April 18 instead of the traditional April 15, which falls on
a Saturday this year.
The most significant reason, however, and one cited by the IRS,
is that a new regulation delayed refunds by taxpayers claiming
an Earned Income Tax Credit or an Additional Child Tax Credit
until Feb. 15. (http://reut.rs/2nwxqX1)
This caused a slowdown among Andy Stadler's tax preparation
clients in Terre Haute, Indiana. His office typically prepares
7,000 returns a year. The Path Act, as the new regulation is
known, affected about 70 percent of the people in his area. Now
that the delayed refund date has passed, Stadler expected a
flood of late filers in April.
In higher-income areas, some of the procrastinators are waiting
for brokerage statements or paperwork known as K-1s, which
details income from partnerships, trusts or S corporations.
Jeffrey Schneider, an enrolled agent with offices in Port St.
Lucie and Royal Palm Beach, Florida, said this was slowing down
some of his clients. He has not even received the paperwork
needed to complete his own taxes yet.
Nevertheless, he is still working 12-hour days to get through
the files already on his desk.
An intangible factor gumming up the works this year is anxiety
about the winds of change in Washington.
Andy Stadler said he has called a few stragglers to ask why they
have not yet made an appointment with him, and they explained
that they did not want to file yet because they were waiting to
see what President Donald Trump would do with the tax code.
"I explained that whatever changes there would be would not be
for 2016, Stadler said. "Then they came in and took care of
things."
(Editing by Lauren Young and Cynthia Osterman)
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