Less than two weeks before the filing deadline, the IRS is catching up on
processing tax returns in this delayed tax-filing season, though it is still
lagging behind last year's pace.
The IRS says it processed 77.1 million tax returns through March 22, the most recent available data. That is down from 82 million returns processed by the same time last year.
The average refund is $2,827 this year. That's down slightly from $2,860 last year.
The delay has a simple explanation: Congress. Lawmakers failed to agree on a new tax law until the start of the new year, when they reached a deal to avoid going over a "fiscal cliff" -- major tax increases set to take effect Jan. 1. The agreement made tax cuts permanent for most taxpayers but included several new provisions.
The IRS needed more time to update its computers and forms. It started processing returns about 10 days later than usual.
It has since been closing the gap. The IRS says it has processed 6% fewer tax returns than in the same period last year. On March 1, the gap was 13.1%.
The IRS has accepted 72.5 million electronic returns so far this year, down from 75.1 million by this time last year. It has made 57 million direct-deposit refunds totaling $171 billion. The average direct deposit refund is $2,985, slightly below the $3,030 direct-deposit refund last year.
Despite the late start, the IRS expects the time it takes to issue refunds to be the same as last year, when more than nine of 10 refunds to taxpayers took less than 21 days, agency spokesman Grant Williams says.
Across-the-board federal spending cuts, known as sequestration, have not spared the IRS. However, the tax agency does not plan to start employee furloughs until summer, after tax season ends. That means a full staff to process returns and answer phone calls, but later cutbacks could affect audits and enforcement.
The IRS advises taxpayers to call its help line later in the day and later in the week, when calling volumes tend to be lower.
"It's been an unusual season," says Julie Miller, spokeswoman for Intuit TurboTax. "Consumer behavior has been pushed back a bit." For example, delays in processing claims for the education tax credit delayed more than 600,000 filers until mid-February. "People must be thinking that they'll wait until the dust settles before they file," she says.
Despite the delays, the number of people asking for extensions remains almost the same as in the same period last year, Miller says.
Activity has been accelerating at TurboTax as the April 15 deadline draws near, Miller says. "There are millions of folks who have yet to file, and they will need to do so between now and two weeks from now. We're anticipating a very busy two weeks."
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