In an Oct. 6 letter to Congressional tax writers, IRS Commissioner John Koskinen warned that the IRS may have to delay the start of the 2015 filing season, as well as the processing of refunds, if Congress fails to provide a "clear policy direction" before the end of November.
Koskinen was referring to dozens of tax provisions that expired at the end of 2013. Congress has for months debated extending the provisions, but the parties cannot agree on the method. The House passed legislation to make several of the provisions permanent, including bonus depreciation and the research credit. The Senate has taken an incremental approach, passing only a package extending almost all of the provisions for two years, albeit with some modifications to some provisions.
The IRS began preparing for the 2015 filing season months ago, according to Koskinen. Those preparations included training customer service personnel, revising forms and publications, and programming IRS technology systems to reflect changes in the law.
If Congress delays action on extenders until later in the year and uncertainty remains, the IRS could face operational and compliance risks, Koskinen said. The 2014 filing season was delayed by 10 days because of the 16-day government shutdown in October 2013. In 2013, the IRS delayed accepting returns until Jan. 30, partly because of Congress' early-morning legislation on New Year's Day to pass tax extenders to avoid default.
It's unclear when Congress will pass extenders legislation, but most observers expect action during the lame-duck session. With Congress adjourned until after the November mid-term elections, the next month is unlikely to see much, if any, activity on Capitol Hill.
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