2014 Tax Season to Start Later

The Internal Revenue Service has delayed by approximately one to two weeks the start of the 2014 filing season to allow adequate time to program and test tax processing systems following the 16-day federal government closure.

The original start date of the 2014 filing season was January 21, and with a one- to two-week delay, the IRS would start accepting and processing 2013 individual tax returns no earlier than January 28 and no later than February 4.

Taxpayers must still file a return by April 15, and companies must still send W-2 and other tax forms on schedule, usually by January 31.

The government closure came during the peak period for preparing IRS systems for the 2014 filing season. Programming, testing and deployment of more than 50 IRS systems is needed to handle processing of nearly 150 million tax returns. Updating these core systems is a complex, year-round process with the majority of the work beginning in the fall of each year.

In addition, IRS processes, applications and databases must be updated annually to reflect tax law updates, business process changes, and programming updates in time for the start of the filing season. There are many tax changes this year, particularly due to the 3.8 percent net investment income tax from the Affordable Care Act.

About 90 percent of IRS operations were closed during the shutdown, with some major workstreams closed entirely during this period, putting the IRS nearly three weeks behind its tight timetable for being ready to start the 2014 filing season. There are additional training, programming and testing demands on IRS systems this year in order to provide additional refund fraud and identity theft detection and prevention.

During the closure, the IRS received 400,000 pieces of correspondence, on top of the 1 million items already being processed before the shutdown.

This will be the second tax season in a row to have a delayed start. Last year’s filing season was significantly delayed because Congress passed the American Taxpayer Relief Act of 2012, which contained many retroactive provisions, in January 2013, and the IRS needed time to update forms and program and test its processing systems.

The IRS is exploring options to shorten the expected delay and will announce a final decision on the start of the 2014 filing season in December.