IRS Announcement: IRS Delays Start of the 2013 Tax Season

"January 8, 2013

WASHINGTON — Following the January tax law changes made by Congress under the American Taxpayer Relief Act (ATRA), the Internal Revenue Service announced today it plans to open the 2013 filing season and begin processing individual income tax returns on Jan. 30.

The IRS will begin accepting tax returns on that date after updating forms and completing programming and testing of its processing systems. This will reflect the bulk of the late tax law changes enacted Jan. 2. The announcement means that the vast majority of tax filers -- more than 120 million households -- should be able to start filing tax returns starting Jan 30.

The IRS estimates that remaining households will be able to start filing in late February or into March because of the need for more extensive form and processing systems changes. This group includes people claiming residential energy credits, depreciation of property or general business credits. Most of those in this group file more complex tax returns and typically file closer to the April 15 deadline or obtain an extension.

“We have worked hard to open tax season as soon as possible,” IRS Acting Commissioner Steven T. Miller said. “This date ensures we have the time we need to update and test our processing systems.”

The IRS will not process paper tax returns before the anticipated Jan. 30 opening date. There is no advantage to filing on paper before the opening date, and taxpayers will receive their tax refunds much faster by using e-file with direct deposit.

“The best option for taxpayers is to file electronically,” Miller said.

The opening of the filing season follows passage by Congress of an extensive set of tax changes in ATRA on Jan. 1, 2013, with many affecting tax returns for 2012. While the IRS worked to anticipate the late tax law changes as much as possible, the final law required that the IRS update forms and instructions as well as make critical processing system adjustments before it can begin accepting tax returns.

The IRS originally planned to open electronic filing this year on Jan. 22; more than 80 percent of taxpayers filed electronically last year.

Who Can File Starting Jan. 30?
The IRS anticipates that the vast majority of all taxpayers can file starting Jan. 30, regardless of whether they file electronically or on paper. The IRS will be able to accept tax returns affected by the late Alternative Minimum Tax (AMT) patch as well as the three major “extender” provisions for people claiming the state and local sales tax deduction, higher education tuition and fees deduction and educator expenses deduction.

Who Can’t File Until Later?
There are several forms affected by the late legislation that require more extensive programming and testing of IRS systems. The IRS hopes to begin accepting tax returns including these tax forms between late February and into March; a specific date will be announced in the near future.

The key forms that require more extensive programming changes include Form 5695 (Residential Energy Credits), Form 4562 (Depreciation and Amortization) and Form 3800 (General Business Credit). A full listing of the forms that won’t be accepted until later is available on IRS.gov.

As part of this effort, the IRS will be working closely with the tax software industry and tax professional community to minimize delays and ensure as smooth a tax season as possible under the circumstances.

Updated information will be posted on IRS.gov."

(The above content is as it appeared in an official IRS press release distributed on January 8th, 2013.)

IRS Announcement: Modernized E-File (MeF) Delay for Some 2012 Business Returns

"The IRS continues to review the details and impact of the new tax law signed this week, but a number of these provisions will require changing forms and updating our processing systems involving non-1040 business returns. As a result, electronic filing of many business returns will be delayed while we update forms, related instructions and corresponding systems. This delay is not expected to significantly impact business filers since most of these returns with reporting periods ending Dec. 31, 2012, are not due until March or April 2013, depending on the form.

The IRS will not accept these business tax returns for processing through MeF at this time*:

• All 2012 tax year business forms (other than Forms 2290 and 7004)
• Form 8849, Schedule 3 - Certain Fuel Mixtures and the Alternative Fuel Credit
• Form 990 series (Tax Exempt tax returns)

Beginning Jan. 7, 2013, the IRS will accept these forms for processing through MeF:

• Fiscal year returns with a year ending prior to 12/31/2012
• All 2011 tax year and 2012 fiscal year business returns, including Form 1120 series
• 2012 tax year Form 2290, Heavy Highway Vehicle Use Tax Return
• 2012 tax year Form 7004, Application for Automatic Extension of Time to File Certain Business Income Tax, Information and Other Returns

We will share additional information on when we can accept the remaining 2012 tax year business forms as soon as it becomes available. More information will also be available soon regarding 2012 individual 1040 tax returns impacted by this week’s legislation.

* Note: Business tax returns not processable through MeF at this time will also not be processed if submitted on paper."

(The above content is as it appeared in an official IRS Quick Alerts e-mail distributed on January 4th, 2013.)

IRS Update: Tax Relief Extension Act

Expired 2012 Federal Tax Provisions Extended by the Tax Relief Extension Act

Late on January 1, 2013, Congress passed HR 8 (Tax Relief Extension Act) which extended almost all of the Federal tax provisions that had expired at the end of 2011 and 2012.

Although the Tax Relief Extension Act contains many individual, business, and energy tax provisions that were extended or modified, the following are the ones that will have the most impact on taxpayers filing their 2012 Federal returns this coming filing season.

Alternative Minimum Tax (AMT)
The Alternative Minimum Tax (AMT) provisions were permanently extended as follows:

• The exemption amount will be indexed for inflation each year. For 2012 the exemption amounts are:
• Single/Head of Household: $50,600
• Married Filing Joint: $78,750
• Married Filing Separate: $39,375
• All personal nonrefundable credits may be used in calculating the AMT. This also means that the order these credits are taken against regular tax will remain as they currently are.

Individual and Business Provisions
The following individual and business provisions were extended and will apply to Tax Years 2012 and 2013:

• $250 Educator Expense Deduction – Form 1040, line 23
• Tuition and Fees Deduction – Form 8917 and Form 1040, line 34
• Read more

Section 179 Expense
The following Section 179 provisions were extended and will apply to tax years 2012 and 2013:

• Maximum deduction: $500,000
• Maximum cost before the limit is reduced: $2,000,000
• Read more

Click here to read the entire CrossLink Tax Update that includes further information on the Tax Relief Extension Act and Federal tax provisions that were and were not extended.

UPDATE to Dec 21 Post: IRS E-Services Portals Unavailable until Jan 6

As an update to our previous post from December 21, the IRS has announced that the e-Services’ Transcript Delivery System, Disclosure Authorization and Electronic Account Resolution systems will be unavailable for three additional business days - returning to operation on January 6, 2013.

During this time, you will be unable to request transcripts, submit a new Form 2848, Power of Attorney and Declaration of Representative, Form 8821, Tax Information Authorization, or use Electronic Account Resolution. The IRS encourages users to hold their transactions until the system is once again operational.

IRS Centralized Authorization File System Down for Maintenance

The IRS has announced that the Centralized Authorization File system (CAF) will be unavailable due to maintenance starting 6AM EST December 26th and will be back up on January 2nd at 6:30AM EST. This outage will affect the Transcript Delivery Service and Disclosure Authorization systems. Please plan to have any requests submitted no later than midnight, December 25th or hold them until the maintenance is concluded.