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.

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

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.

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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.

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Any opinions expressed in this column are solely those of the author.