IRS Commissioner Warns Tax Refunds Could Be Delayed By Budget Cuts

Taxpayers who file their tax returns on paper could face delays of a week or more on their refunds this tax season because of budget cuts, Internal Revenue Service Commissioner John Koskinen warned.

 In a memo sent to IRS staff on Tuesday, Januray 13,2015 Koskinen offered details on the impact of the recent budget cuts on IRS operations, which he warned would lead to a longer hiring freeze, fewer resources dedicated to customer service, tax enforcement and overtime, and a possible two-day furlough for IRS employees.

 The budget cuts will have an impact on taxpayers and preparers.

 “People who file paper tax returns could wait an extra week—or possibly longer—to see their refund,” Koskinen wrote. “Taxpayers with errors or questions on their returns that require additional manual review will also face delays.”

 Koskinen noted that Congress approved a $10.9 billion budget for the IRS, meaning the agency will have to absorb a cut of $346 million during the remaining nine months of the fiscal year.

 “But that really amounts to a total reduction of about $600 million when you count another $250 million in mandated costs and inflation,” he added. “This is the lowest level of funding since 2008, and the lowest since 1998 when inflation is considered.”