2015 Tax Season Could Be Worst in Years
For several reasons, experts believe that the upcoming 2015 tax filing season could be the worst in years. John Koskinen, Internal Revenue Service (IRS) Commissioner cautions that IRS phone service could fall as low as 53% (down by 72% in 2014) and the average hold time is projected at 34 minutes. National Taxpayer advocate Nina Olson has suggested that it could “rival the 1985 filing season when returns disappeared”.
Factors contributing to the dismal outlook include:
• IRS budget cuts imminent
• Laws are being passed that the IRS must implement however they are not receiving the funding required for implementation so they are now forced to use money out of taxpayer services budget:
• The Affordable Care Act (ACA)
• Foreign Account Tax Compliance Act (FACTA)
Two provisions from the ACA become effective in the 2015 tax filing season on Form 1040 – much of which is dependent upon receiving accurate information from the health exchanges.
1. Premium tax credit
2. Individual shared responsibility payment
Finally, there are more than 50 tax extender laws that Congress has yet to vote on but are expected to deal with in the upcoming season. The IRS Commissioner warns that if the uncertainty of these laws continues it could delay the start of the filing season and tax refunds.
Some of the tax breaks that are dead until voted on include some of the more popular breaks:
• State and local sales taxes
• Private mortgage insurance premiums
• Section 179 deduction limits
• Educators’ out-of-pocket expenses
• Higher education tuition and fees
• Residential home energy improvements
“Although it is anticipated many of these tax breaks will be extended, their legislation passing them may not occur until late December”, Davis & Hodgdon Associates CPAs Managing Partner John Davis speculated. “It will then take the IRS weeks to incorporate these provisions into the 2014 tax forms, contributing to the inevitable delay of tax return filing.”
Davis and Hodgdon Associates CPAs has been assiting nonprofits, individuals and businesses with tax and accounting services in the Burlington Vermont Metro area for more than 20 years. If you have any questions or concerns please feel free to call 802.878.1963 or email [email protected].