CAUTION: ROUGH TAX SEASON AHEAD

Fraud, identity theft, expired tax savings, the fiscal cliff.

Add them all up and we’re in for a challenging tax season. Here’s what you can expect.

LATE START

The first day for efiling your 2012 return is January 22, 2013. How does this compare to other years?

Before 2012, efiling for individual returns usually started the second Friday in January. In 2012, the IRS delayed the efiling start until January 17 (the third Tuesday in January) and for 2013 the start is yet another week later.

Returns filed the first week of efiling often take a few extra days of processing, so the earliest refunds probably won’t show up until nearly mid-February. While you could get a jump start on filing by mailing your return in before January 22, refunds on mailed-in returns usually take four weeks to process, rather than the two to three weeks for efiled returns.

REFUNDS MAY BE SLOWER

Fraud and identity theft are a growing problem for the IRS. New screening and matching processes at the IRS will slow down some refunds. According to an IRS statement, 90 percent of refunds were issued in 21 days or less last year and they expect the same results this year.

What the IRS didn’t say is that most direct deposit refunds were made in fewer than 14 days in the past and efiled returns with refund checks mailed were received by taxpayers in about three weeks. So we expect slower refunds.

How slow? Hard to tell. In previous years the IRS issued a chart that indicated the date to expect a refund based on the date the return was accepted at the IRS. That chart has been discontinued.

And adding to the uncertainty, the popular Where’s My Refund? feature at irs.gov won’t give an expected refund date until several days after the IRS receives the tax return.

SOME FORMS MAY BE DELAYED

Blame the fiscal cliff. Several tax laws expired on December 31, 2011. They haven’t been renewed. But they may still be resurrected if Congress reinstates them (or some modification of them) retroactively.

Oddly enough, this isn’t news – it seems to happen nearly every year – especially with regard to the alternative minimum tax (AMT). The IRS is left in a no-man’s-land to decide how to write forms, instructions, and software programming.

And if they guessed wrong, they have to redo their work.

So, the date you can file your tax return depends on how accurately the IRS guessed about what the 2012 tax laws will be by the time retroactive changes are passed. If you need a form that’s not available because of tax law changes, it may be March before you can file.

One thing is for certain – the 2013 tax return season will be anything but boring!