At a hearing on Capitol Hill, Koskinen said that close to half of filers could see a delay in refunds. The National Treasury Employees Union is also saying that IRS walk-in offices could have wait times stretching for hours, and that callers may find it difficult to reach a representative.
“Everybody’s return will get processed,” Koskinen told reporters. “But people have gotten very used to being able to file their return and quickly getting a refund. This year we may not have the resources, the people to provide refunds as quickly as we have in the past.”
The blame for this falls on budget cuts that Congress is enacting for the new fiscal year. With a new budget of $10.9 billion, the IRS is working with $346 million less than the previous year, and $1.2 billion less than 2010.
These cuts also come at a complicated time for the IRS, as it is starting to play a larger part in implementing the Affordable Care Act. Taxpayers will now have to list whether they have health insurance, and any tax credits used to help with insurance premiums will also have to be reported.
Many suggest that Obamacare’s new entanglement within the tax code may be the reason for Congress’s decision. Cutting IRS funding could be a backdoor strategy to weaken the President’s healthcare law. Most of the budget bill amendments that are gutting the funding were attached by Republican lawmakers.
But Koskinen says this kind of strategy won’t work, since the IRS will still be required to enforce the law, regardless of how long it takes.
“In some ways, these budget cuts are really a tax cut for tax cheats,” Koskinen said. “Because to the extent we have fewer people to audit and enforce the tax code, that means some people cutting corners on their taxes or not complying are going to get away with it, and that is a decision that Congress has made.”
Tax refunds are typically given within 21 days of filing. Koskinen says that while filing season will start on time next month, he isn’t prepared to say how much slower refunds will be processed.
