Government Shutdown and 2013 Tax Refund Delays

The government shutdown that occurred in October 2013 will likely have effects on the 2014 tax filing season and will push tax refunds from 2013 further back into 2014. The IRS announced that it would not start processing 2013 tax returns until January 31, 2014.


Government Shutdown and 2013 Tax Refund Delays

This is 10 days later than originally scheduled which could mean a delay in a tax refund for certain types of taxpayers. However, this delay won’t matter to a lot of people because W-2s, 1099s, etc. don’t have to be ready until the end of January. Most employers and banks will wait to close to this deadline before sending out information. As such, most people can’t file until sometime in February anyway. Therefore, the delay does not seem as serious as people are making it about getting their tax refunds late. Furthermore, estimated taxes and quarterly returns; individuals with no income who qualify for tax credits (money for not paying any money) and those who estimate their taxes can, in theory, file as early as January 1.


Government Shutdown and IRS

The IRS put that blame on this delay by the 16-day partial government shutdown in October.  The shutdown stopped the normal working operations of the IRS and interrupted the process for updating IRS systems for the 2014 tax season. During this shutdown, IRS staff were not working on updating 2013 tax forms and planning how to operate the 2014 tax season.

Taxpayers are advised to file their taxes as soon as possible for 2013 in order to get their tax refunds the quickest. Using e-file will also ensure that 2014 tax refunds are quickly deposited into a taxpayers bank account if they are using the direct deposit option instead of mail to get their refund checks.

The tax  due date for returns still  remains April 15, 2014 which is set by statute. Taxpayers can request request an automatic six-month extension for filing your return. Although it is heavily recommended that any taxes owed should be paid by April 15 because after that date the taxpayer may be liable for penalties and interest.