The downside of tax changes is it seems like there’s always one more that could be deployed after January 1st, but as a general rule, if you didn’t take the deduction or the credit, likely, it’s gone. Of course there are exceptions – IRAs for example – but for the most part, the door is closed.
Taxpayers have a number of deadlines they have to meet every year. Many of them wait until the last minute to complete their tax returns or file for extensions, facing the danger of costly penalties if they don’t get things done in time.
You don’t often hear about the IRS needing an extension to get its part of the tax puzzle completed, but that’s exactly what could happen this year. The magnitude of changes to the tax laws over the past year and the governmental shutdown means the tax agency could have a tough time starting the 2019 tax season on time.
The challenges began with the complexity of the tax changes and those would be hard enough. Among the highest priority items were concerns about taxpayer data security, identity theft, enabling greater online access for taxpayer services, and upgrading key systems. Many of these issues have been near the top of similar lists for years, reflecting the ongoing need to deal with these problems and the difficulties in finding lasting solutions.
With the implementation of the Tax Cuts and Jobs Act, the IRS is facing the need for massive resources to meet taxpayer expectations while still ensuring compliance with all the new laws in their entirety. Now, with the government shutdown, the ability for the IRS to meet these changes for the 2019 tax season may very well prove insurmountable.
The Tax Cuts and Jobs Act contained nearly 120 provisions that the IRS is responsible to administer, affecting both domestic and international taxation. The tax agency quickly estimated that implementing tax reform would require creating or revising roughly 450 forms, publications, and sets of instructions. In addition, roughly 140 information technology systems to process tax returns and monitor compliance would require modifications to ensure smooth operation, and the IRS would need to handle roughly 4 million additional telephone calls and other contacts from taxpayers trying to figure out what impact the new tax laws would have on their own individual returns.
The Inspector General praised early IRS attempts to get things moving in the right direction, but it’s still warning that the 2019 tax filing season could get delayed. Historically, returns become available for filing around the third or fourth week of January. Yet with the IRS IT department having already missed some early deadlines, it’s possible that there won’t be enough time for testing near year-end without putting off the start of tax season. Already, some information that the IRS typically releases, such as tax brackets and annual changes to various thresholds and limits, weren’t produced as early as they have in previous years.
Taxpayers need to keep an eye on the IRS to see how the shutdown will ultimately impact the tax season. Unless the tax agency can pick up the pace and move as efficiently as possible, then taxpayers in a hurry to get their returns filed to claim their refunds could have to wait longer than they’d like.
If you or your clients have any tax issues or problems with the IRS/State or other federal tax problems, please feel free to contact me directly at (909) 570-1103 or by email at Carlos@HealthcareTaxadvisor.com
Carlos Samaniego, EA
Licensed by The Department of Treasury to represent taxpayers
1255 W Colton Ave, #535
Redlands, CA 92374
Yesterday, I attended an event by Covered California where some top officials flew in from Sacramento to have a discussion about Covered California and current updates, concerns, tips for the last month of open enrollment.
It really bothered me when they mention there was over 700 registered agents in the area that was notified about this event, and only about 50 actually showed up. How are you supposed to give your clients the best possible help if you do not really understand what is happening.
I learned so much in this 3 hour session it should have been mandatory for all agents, there was a lot of valuable insights, tips, and recommendation we learned.
I spent quite a bit of time speaking with the Director of Sales for Covered California, Kirk Whelan.
The highlight, was when I was honored to be asked to give my insights on the tax implications this year with IRS and Affordable Care Act.
I have a unique insight being a licensed tax preparer and Certified Covered California Insurance Agent.
After the event, I was invited by the City of San Bernardino Employment & Training Agency, to speak and educate up to 30 of their field staff and Certified Enrollment Counselors for Covered California, to discuss what to they can expect this tax season, to discuss the 1095 forms that consumer will start getting any day, and to discuss more about tax implications, tax penalties, and subsidies.
Looking forward to speaking at this event. If you have any questions about how ACA could affect your taxes gives us a call 909-570-1103