Tax Expert: IRS Announcement Is Nearly Unprecedented

An expert tax advisor stated that the most recent Internal Revenue Service (IRS) (IRSMillions of taxpayers were alerted that filing tax returns should be delayed. This is unprecedented.

The IRS will be open on February 10, 2010. issued New guidance regarding special payments was provided by 21 states in the last year. The announcement came just a week following the agency’s warning to taxpayers that they should not delay in providing additional guidance on special payments and whether or not they are subject to federal regulations. Taxes.

“The IRS has determined that in the interest of sound tax administration and other factors, taxpayers in many states will not need to report these payments on their 2022 tax returns,” In its most recent update, the IRS stated. “The IRS appreciates the patience of taxpayers, tax professionals, software companies and state tax administrators as the IRS and Treasury worked to resolve this unique and complex situation,” It said.

One tax expert said that the delay in filing due to announcements made earlier in February is unusual.

“I know when we had the American Rescue Plan back in 2021 and we got that late guidance on the part of unemployment being excluded, but I have been doing taxes for 32 years, I am not aware the IRS has said to wait on filing,” Tom O’Saben, the director of Tax Content and Government Relations with the National Association of Tax Professionals, Telled The Center Square

O’Saben added that he cannot recall a similar instance of the IRS making such a request. “It’s nearly unprecedented, yes,” He said.

In a prior press release, IRS stated that it recommended people who have already filed their taxes not to file an amended return. O’Saben said he agrees with the agency’s assessment.

“For those who have already filed their returns, don’t do anything,” added O’Saben, who gave his interview with the Center Square before the agency issued its revised guidance. “We believe that for more than 90 percent of the population, it is probably a non-event.”

An IRS watchdog on February 9 faulted The IRS should have known about state payments, the agency that advised taxpayers to defer filing their returns for approximately a week. It issued the revised guidance a day later.

“The impact of the delay in providing timely information and guidance is hard to overstate,” The Taxpayer Advocate Service, a federal agency of the IRS, posted the following information on its website. “Giving taxpayers a choice between waiting to file their returns and receive their refunds or filing returns now that the IRS may later determine to be inaccurate is not acceptable.”

 

Washington’s Internal Revenue Service (IRS), building on February 19, 2014. (Jim Watson/AFP/Getty Images)

Taxpayers who have filed their returns already “likely will need to file amended returns to exclude the payments if the IRS determines they are not taxable,” It said. “That means they will need to spend time and money to file amended returns and then wait for their refunds, and it means the IRS will have to devote resources to processing amended returns and issue refunds,” According to the agency,

What the IRS Said

The IRS said on Feb. 10 that it won’t “challenge the taxability of payments related to general welfare and disaster relief,” impacting people in California, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Maine, New Jersey, New Mexico, New York, Oregon, Pennsylvania, and Rhode Island who got state payments.

Refunds of state taxes received and paid in Georgia, Massachusetts and South Carolina. “either the recipient claimed the standard deduction or itemized their deductions but did not receive a tax benefit,” These payments are “not included in income for federal tax purposes,” The tax agency stated.

The IRS said in its February 3, statement that there are several a “variety of state programs that distributed these payments in 2022 and the rules surrounding them are complex” And that “we expect to provide additional clarity for as many states and taxpayers as possible next week.” The tax professional advised taxpayers to either wait or find a tax professional.

The IRS announced earlier this year that the 2023 tax season would begin on Jan. 23. Deadline to file tax returns is April 18, 2023.

According to the IRS’s website, taxpayers should expect to receive their 2022 tax refund within about 21 days of submitting their return if they file electronically. According to the website, those who have the Earned income tax credit or additional child tax credit will need to wait longer.