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Oh, No! The Sequester Will Delay Tax Refunds!

From the ‘sequest-erics’ at the Politico:

Sequestration: Expecting a tax refund? It may be delayed

By RACHAEL BADE | February 25, 2013

Law-abiding taxpayers could shoulder the brunt of the blow when the sequester hits the Internal Revenue Service Friday — and tax cheats might find it easier to rig the system…

Absent a last-minute deal, the 8.2 percent funding cut facing the cash-strapped IRS will most likely translate to fewer specialists on hand to help taxpayers with their returns and to root out fraud — two tasks that watchdog groups say need more, not fewer, hands…

We thought the ‘cash strapped’ IRS has been on a hiring spree.

“At a minimum, it’s probably going to take longer for people to get through on the phone; it’s going to take longer for refunds to be processed,” said Floyd Williams, a senior tax counsel at Public Strategies Washington.

This is just hilarious. Every year it’s the same story. The evil Republicans are doing something [fill in the blank] which means that millions of Americans will have to wait for their refund checks.

In fact, they aren’t even waiting a year between these stories. A few weeks ago these delays were being blamed on the Republicans’ obstreperousness over the ‘fiscal cliff.’ (See below.)

Williams, who worked for the IRS for nearly two decades and directed the agency’s legislative affairs office for 16 years, says the sequester could also be a boon to those who purposely commit fraud or accidentally fill out returns incorrectly.

“Anytime there is a drop-off in enforcement, you’re going to see a growth in the so-called tax gap, which is the difference between what the government collects and what is rightfully owed,” he told POLITICO.

Right now, that gap is close to $400 billion…

So even without the sequester cuts, the IRS is unable to collect $400 billion dollars a year that it is owed? What good are they?

The IRS has already shaved its 91,000-person workforce by 10,000 employees via attrition over the past two years. Like many agencies, it’s been operating on a reduced budget…

That’s not what we’ve heard.

Sequester furloughs would equate to fewer operators or reduced hours at IRS taxpayer call centers, experts say. Consequently, millions of Americans phoning for help with their returns might not get calls back.

And they might not get the misinformation that the IRS is famous for, either.

Last year, more than 115 million people called the IRS for help; only 68 percent of those who wanted to speak with tax experts actually got through — and only after holding for an average of 17 minutes on phone lines.

One million of the 10 million written inquiries mailed to the IRS last year also did not get a response…

What was the excuse then?

David Kendall, a fiscal policy expert at the centrist Democratic think tank Third Way, says sequester cuts will also slow tax returns since there will be fewer employees to help with processing.

“Your refund checks are going to come later,” he warned, adding that vice versa, taxes owed to Uncle Sam will also take longer to make their way into the Treasury.

Another fear expressed by IRS officials and tax experts alike: Tax cheats will have a better chance of getting away with their crimes because the enforcement arm of the IRS will also be slashed.

They are already getting away with $400 billion a year. How much worse could it get?

But they aren’t even waiting a full year to blame the Republicans for refund delays. Here is a flashback to the beginning of this month, via the archives of the Los Angeles Times:

IRS delays issuing tax refunds; fiscal cliff to blame?

By Walter Hamilton | February 8, 2013

Don’t worry if you haven’t received your expected IRS tax refund. Most people haven’t — and the fiscal cliff is to blame.

The Internal Revenue Service is far behind its normal pace in processing federal tax returns and mailing billions of dollars in refunds, according to a new report.

Through Feb. 3, the agency sent out only about $4.3 billion in refunds, according to the analysis by Nicolas Colas, chief market strategist at ConvergEx Group in new York.

That’s far behind the $26.9 billion in refunds issued at this point in 2012. That’s a difference of $22.6 billion.

And 2012 itself was a slow year because the IRS was grappling with security issues, according to Colas. Going back to 2005, the IRS normally has mailed $30 billion to $40 billion in refunds by this point.

This year’s delay is an unwelcome byproduct of Congress’ acrimonious standoff over the so-called fiscal cliff at the end of last year, according to Colas. The IRS had to wait for the year-end jockeying to conclude before it could determine exact tax policy and print the appropriate forms.

The agency only began accepting returns from individual taxpayers on Jan. 30. And those with more complicated returns — such as small businesses claiming depreciation credits and families with educational write-offs — won’t even be able to file for several more weeks because the applicable forms aren’t ready yet.

Aside from the annoyance for people awaiting a return of their money, the delay could weigh on the economy in the early part of 2013

By the way, have we ever been told that Obama-Care might cause a delay in tax returns? Even though everyone will have to prove they have insurance or pay a fine.

Or that Obama-Care might lead to more tax fraud? Even though there will be massive new and complicated ‘subsidies.’ Of course not.

This article was posted by Steve on Monday, February 25th, 2013. Comments are currently closed.

2 Responses to “Oh, No! The Sequester Will Delay Tax Refunds!”

  1. heykev says:

    This is another canard by the MSM. Most of the people now file electronically. They are processed by the computer(s) the IRS has. You refund money is then electronically deposited into your back account…no real person ever really sees or reviews your taxes unless you get selected for an audit. The remainder of those who file use the pre-printed forms, send them in and they are all scanned in electronically and again, no person ever touches them.

    Those that do file “complicated” returns (they all are designed to be incomprehensible) must be part of the evil-rich and can therefore wait until the IRS deems you worthy to get you money back.

  2. untrainable says:

    If the treasury wants to save 400 billion dollars, they can keep the 85 billion dollars a month that they are printing out of thin air and flushing into the stock market from now until… July. Tadah!

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