Taxpayers Delay Filing Their 2016 Returns

Reuters reported that the number of taxpayers who filled their taxes for 2016 with the IRS is below last year’s one. The number of returns received by the Internal Revenue Service was off 8.5% from Jan. 23 through March 3. The refunds have also been down 7.1% in dollar terms.

According to the new agency, those numbers are “flat year to year, so a significant drop in tax filings means something unusual is going on”. One possible reason is that the tax deadline for 2016 fillings is April 18, instead of the traditional April 15, which falls on a Saturday 2017.

However, a more significant reason and also one mentioned by the IRS is that a new regulation delayed refunds by taxpayers claiming an Earned Income Tax Credit or an Additional Child Tax Credit until Feb. 15.

Reuters quoted Andy Stadler a company that offers tax preparation services in Terre Haute, Indiana that does 7,000 returns a year, which reported a slow filling process among its clients. The company said that that so-called The Path Act regulation affected about 70% of the people in this part of Indiana. Now that the delayed refund date has passed, Mr. Stadler said he had expected a flood of late filers in April.

In higher-income areas, some of those who postponed their tax fillings are waiting for brokerage statements or paperwork known as K-1s, which details income from partnerships, trusts or S corporations, explains Reuters reporter Beth Pinsker.

Reuters also quotes Jeffrey Schneider, an enrolled agent with offices in Port St. Lucie and Royal Palm Beach, Florida, who said to the news agency that “this was slowing down some of his clients“. He has not even received the paperwork needed to complete his own taxes yet.

Mr. Stadler said to Reuters he has “called a few stragglers to ask why they have not yet made an appointment with him, and they explained that they did not want to file yet because they were waiting to see what President Donald Trump would do with the tax code”. He has explained them that whatever changes the new presidential administration would propose into the tax laws, they should not affect the 2016 tax fillings.