IRS delays handling certain deductions

Photo by Hugh Osteen

Photo by Hugh Osteen

By Johnny Jackson


Internal Revenue Service officials announced Thursday that the agency has a later-than-normal start in processing paper, and e-filed returns, which claim certain itemized deductions.

The delay has pushed processing of those returns to mid-February, according to Mark Green, spokesman for the Internal Revenue Service (IRS). Green said the delay is the result of recent tax law changes.

"The IRS needed the extra time to update its systems to accommodate the tax law changes, without disrupting other operations tied to the filing season," said Green.

The delay followed the enactment, on Dec. 17, of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, he added. It extended several expiring provisions, including the state and local sales tax deduction, higher education tuition and fees deduction, and educator expenses deduction.

According to Green, two-thirds of the nearly four million Georgians who file federal returns each year, will not be affected by the delay, "because they either take the standard IRS deduction, or file later in the tax season, anyway."

For the other third, Green said, the IRS will begin on Feb. 14, processing returns, including those with the Schedule A, higher education tuition deduction, and the educator expenses deduction forms.

In the past, Green said, processing for those deductions began during the first week of January. He said that, nationwide, the IRS handled about nine million tax returns, which claimed at least one of those deductions, a year ago.

People using e-file for the delayed forms can get a head start, because many major software providers have announced they will accept the impacted returns immediately, explained the IRS official. The software providers will hold onto the returns, and then, electronically submit them after the IRS systems open on Feb. 14, for the delayed forms.

"Taxpayers using commercial software can check with their providers for specific instructions," he said. "Those who use a paid tax preparer should check with their preparer, who also may be holding returns until the updates are complete."

Green added that most other returns, including those claiming the Earned Income Tax Credit (EITC), education tax credits, childcare tax credit and other popular tax breaks, can be filed as normal, immediately.

The IRS is expecting to process 140 million tax returns nationwide this year -- 4.1 million of those from Georgia.