IRS Warns of Refund Delays Next Year Due to Resources Crunch

 Posted on November 05, 2014 in Taxation Law

The Internal Revenue Service warns that persons who are expecting tax refunds next year are likely to face delays receiving their checks in the mail. That's because the federal agency is battling a severe resources crunch and budget shortfalls.

According to the Internal Revenue Service Commissioner, the agency is being forced to cut costs in a number of ways, and he expects that a number of services including taxpayer services as well as tax enforcement efforts, could be adversely affected by the shortfall. Of most importance to taxpayers is the fact that their refunds could probably be delayed. There could be fewer staff members for the processing of refunds and you could receive the checks much later than expected.

In recent years, the agency has been able to process tax refunds within a timeframe of three weeks in the case of electronically filed returns. However, that timeframe will probably not apply this year because of the funding crunches. The IRS's troubles stems from budgeting cuts for the budget year ending in 2015. Lawmakers cut the budget by as much as $346 million.

The budgeting crunches also come at a critical time for the tax agency. For the first time, the tax agency will go through health insurance information on tax returns. Under President Obama's healthcare reforms, taxpayers who are covered under a health insurance plan, will have to include this on their tax returns. According to some Republicans in Congress, they are cutting IRS spending as a way to make sure that health reforms will not be implemented.

The agency plans to cut corners in as many ways as possible. Is it is currently in the middle of imposing a freeze on all new equipment, except for any emergency staffing. Almost all overtime is being eliminated.