Bucks: Case of a 145-Day Tax Refund Delay

Tim Ryan has been sucked into a vortex of bad tax luck. Last week, we reported that some taxpayers were facing delays in getting refund checks, due to computer snafus in processing their repayment of the 2008 first-time home buyer tax credit. (The credit was really a no-interest loan and has to be repaid over 15 years, beginning this year). Many of those filers, the Internal Revenue Service says, should begin getting their refunds in April.

But Mr. Ryan, a 28-year old logistics manager near Des Moines, said that when he called the agency on March 11 to check on his refund, a representative said it would be another 145 days — or, sometime in the middle of the summer.

Why the long wait? An I.R.S. spokesman wasn’t able to shed light on the situation. But it appears that Mr. Ryan falls into several different categories of filers cited by the agency as likely to face delays.

For starters, Mr. Ryan claimed the 2008 credit on his 2008 federal tax return and began paying it back on his 2010 return. The I.R.S. acknowledges many such filers were facing delays — although, the agency said, most of them are married couples filing jointly. Mr. Ryan is single. He did, however, try to pay more than the minimum amount due on the credit, which the I.R.S. cited as another factor causing its computers to freak out. Although he was required to pay just $500, he paid $1,250. “I don’t want it hanging over my head for 15 years,” he told me.

More of a mystery, however, is that Mr. Ryan says the I.R.S. rep also told him he was facing an added delay because he filed “too early.”

Because Congress didn’t pass tax legislation until December, the I.R.S. didn’t have as much time as usual to update its computer systems. It announced in January that it wouldn’t accept certain returns — including those from people who took a home buyer credit, or itemized deductions — until Feb. 14.

Mr. Ryan was unaware of that issue. But when he used TaxAct, an online tax service, to file his return electronically on Feb. 3, a message bounced back, telling him that his return would be filed on Feb. 14 because of the I.R.S. delay. And as far as he knows, that’s what happened. So he doesn’t understand why the agency thinks he filed early.

Jessi Dolmage, a spokeswoman for TaxAct, said in an e-mail that its accountants can’t be sure what happened without examining the specific return. But “they’re pretty confident that the 145-day waiting period for his refund has little to do with his ‘filing early’ and more to do with the I.R.S.’s delayed and slow processing of returns with the 2008 first-time home buyer credit,” she said.

Mr. Ryan, who said he’s due a $1,000 refund, said he’s not desperate for it. But he added that he was getting married in the fall and it would be nice to have extra cash to help cover expenses.

Have you been told by the I.R.S. that you filed “too early?” Let us know.

Article source: http://feeds.nytimes.com/click.phdo?i=2cf13869ed58573ea791524d484945f0