Why Your Tax Refund May Be Slower (or Never Arrive) This Year
Tax season just got worse for consumers, thanks to budget cuts at the IRS.
-- A few weeks ago, the IRS said it expects to be unable to answer half of taxpayer calls this year, but that's only the beginning of what promises to be a messy tax season. In an email obtained by ABC News and confirmed by the IRS to Credit.com, IRS Commissioner John A. Koskinen delved into the unpleasant details of how budget cuts will affect IRS operations and taxpayers.
In the email to IRS employees (subject line "Budget update: Tough choices"), Koskinen wrote, "this year we are looking at a situation where realistically we have no choice but to do less with less." Here's what that might mean to you, the taxpayers.
Identity Theft
Tax-related identity theft is the most common source of complaints to the Federal Trade Commission, and the problem continues to grow every year. At the same time, the IRS had planned on beefing up identity theft protection procedures, but those have been put on hold as a result of budget cuts.
That could mean a lot of things, from a decreased capacity to identify potentially fraudulent returns to gaps in protecting consumers whose identities have been stolen. If someone files false tax returns in your name, it can take a long time to get the refund you deserve, and these budget cuts will only exacerbate what's been a longstanding issue at the IRS.
More From Credit.com: Signs Your Identity Has Been Stolen
One of the best ways to protect yourself from tax-related identity theft is to file your tax return as soon as you're able, the idea being you'd beat any identity thieves to the refund to which you're entitled. Identity thieves can also use the data they would need to commit tax refund fraud (your Social Security number, for example) to commit other types of fraud in your name. You should monitor your credit profile for any accounts you don't recognize by pulling your free annual credit reports and monitoring your credit score.
More From Credit.com: How To File Your Taxes for Free
Receiving Your Refund
If you've ever hesitated to compile your tax return using computer software, perhaps this will persuade you to make the technology jump: People who file paper returns may have to wait a week or more than usual to receive their refunds, and people who have questions or errors on their returns may experience similar delays.
On the flip side, the IRS won't be able to conduct as many audits as it has in the past, which may put some taxpayers at ease. Koskinen said reduced enforcement staff will translate into "at least $2 billion in revenue that otherwise would have been collected," so that's not a good thing.
More From Credit.com: What to Do If You're a Victim of Identity Theft
In short: If you're not a victim of identity theft, have no questions in preparing your taxes, make no mistakes and submit electronic paperwork, this shouldn't have a huge impact on you — except the whole $2 billion in lost revenue for the government. That might sting a bit.
Any opinions expressed in this column are solely those of the author.