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IRS says 2017 tax season starts January 23

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WASHINGTON, D.C. (DECEMBER 9, 2016)
BY MICHAEL COHN
The Internal Revenue Service said Friday that next tax season will begin on Monday, Jan. 23, 2017, while warning some taxpayers to expect longer waits for their tax refunds. The tax day deadline will be April 18.

John Koskinen

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The IRS said it would start accepting electronic tax returns on January 23 and it anticipates more than 153 million individual tax returns to be filed next year. The IRS believes more than four out of five tax returns will be prepared electronically using tax preparation software, as was the case last year.

However, even with the January 23 start date, the IRS also pointed out that many software companies and tax professionals will begin accepting tax returns before that date and then they’ll submit the returns when the IRS’s systems open. The IRS will also start processing paper tax returns on January 23. The IRS noted there is no advantage to filing tax returns on paper in early January instead of waiting until January 23 for the IRS to begin accepting e-filed returns.

The IRS also reminded taxpayers that a new law will require the agency to hold back tax refunds claiming the Earned Income Tax Credit and the Additional Child Tax Credit until February 15. The IRS wishes taxpayers to be aware it will take several days for these tax refunds to be released and processed through financial institutions. Factoring in weekends and the President’s Day holiday, the IRS is warning many affected taxpayers may not have actual access to their tax refunds until the week of February 27.

“For this tax season, it’s more important than ever for taxpayers to plan ahead,” IRS Commissioner John Koskinen said in a statement. “People should make sure they have their year-end tax statements in hand, and we encourage people to file as they normally would, including those claiming the credits affected by the refund delay. Even with these significant changes, IRS employees and the entire tax community will be working hard to make this a smooth filing season for taxpayers.”

The IRS also reminded taxpayers to hold onto copies of their prior-year tax returns for at least three years. Taxpayers who are changing the tax software products they use this filing season will need to get their adjusted gross income from their 2015 tax return in order to file electronically. The Electronic Filing Pin is no longer an option. Taxpayers can visit IRS.Gov/GetReady to get more advice on preparing to file their 2016 tax return.

The filing deadline to submit 2016 tax returns is Tuesday, April 18, 2017, instead of the traditional April 15 date. In 2017, April 15 falls on a Saturday, and this would usually move the filing deadline to the following Monday, April 17. However, Emancipation Day—a legal holiday in the District of Columbia—will be observed on that Monday, which pushes the nation’s filing deadline to Tuesday, April 18, 2017. Under the tax law, legal holidays in the District of Columbia affect the filing deadline across the nation.

“The opening of filing season reflects months and months of work by IRS employees,” Koskinen said. “This year, we had a number of important legislative changes to program into our systems, including the EITC refund date, as well as dealing with resource limitations. Our systems require extensive programming and testing beforehand to ensure we’re ready to accept and process more than 150 million returns.”

The IRS noted that it has been working in partnership with the tax industry and state revenue departments as part of its Security Summit initiative to strengthen tax processing systems to protect taxpayers from identity theft and tax refund fraud. Several new provisions are being added in 2017 to expand on the progress made this past year.

2017 IRS Refund Delays

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IRS.gov Newswire

Issue Number: IR-2016-152

Inside This Issue

As Holidays Approach, IRS Reminds Taxpayers of Refund Delays in 2017

WASHINGTON –As the holidays approach, the Internal Revenue Service today reminded taxpayers to remember that a new law requires the IRS to hold refunds until mid-February in 2017 for people claiming the Earned Income Tax Credit or the Additional Child Tax Credit. In addition, new identity theft and refund fraud safeguards put in place by the IRS and the states may mean some tax returns and refunds face additional review.

Some Refunds Delayed in 2017

Beginning in 2017, a new law approved by Congress requires the IRS to hold refunds on tax returns claiming the EITC or the ACTC until mid-February. The IRS must hold the entire refund – even the portion not associated with the EITC and ACTC — until at least Feb. 15. This change helps ensure that taxpayers get the refund they are owed by giving the agency more time to help detect and prevent fraud.

”This is an important change as some of these taxpayers are used to getting an early refund,” said IRS Commissioner John Koskinen said. “We want people to be aware of the change for their planning purposes during the holidays. We don’t want anyone caught by surprise if they get their refund a few weeks later than in previous years.”

As in past years, the IRS will begin accepting and processing tax returns once the filing season begins. All taxpayers should file as usual, and tax return preparers should submit returns as they normally do. Even though the IRS cannot issue refunds for some early filers until at least Feb. 15, the IRS reminds taxpayers that most refunds will be issued within the normal timeframe: less than 21 days, after being accepted for processing by the IRS. The Where’s My Refund? tool on IRS.gov and the IRS2Go phone app remains the best way to get this status of a refund.

Stronger Security Filters and Tax Refund Processing

As the IRS steps up its efforts to combat identity theft and tax refund fraud through its many processing filters, legitimate refund returns sometimes get delayed during the review process. While the IRS is working diligently to stop the issuance of fraudulent refunds, it also remains focused on releasing legitimate refunds as quickly as possible.

Recently, the Internal Revenue Service, state tax agencies and industry partners finalized plans for 2017 to improve identity theft protections for individual and business taxpayers. This comes after making significant inroads this year against fraudulent returns. Additional safeguards will be set in place for the upcoming 2017 filing season.

The IRS and its partners saw a marked improvement in the battle against identity theft in 2016. This is highlighted by the number of new people reporting stolen identities on federal tax returns falling by more than 50 percent, with nearly 275,000 fewer victims compared to a year ago.

“These increased security screenings are invisible to most taxpayers,” Koskinen said. “But we want people to be aware we are taking additional steps to protect taxpayers from identity theft, and that sometimes means the real taxpayers face a slight delay in their refunds.”

For more steps planned for the 2017 tax season, see Security Summit.

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