IR-2018-01, Jan. 04, 2018                                                                            

WASHINGTON ― The Internal Revenue Service announced today that the nation’s tax season will begin Monday, Jan. 29, 2018 and reminded taxpayers claiming certain tax credits that refunds won’t be available before late February.

The IRS will begin accepting tax returns on Jan. 29, with nearly 155 million individual tax returns expected to be filed in 2018. The nation’s tax deadline will be April 17 this year – so taxpayers will have two additional days to file beyond April 15. 

Many software companies and tax professionals will be accepting tax returns before Jan. 29 and then will submit the returns when IRS systems open. Although the IRS will begin accepting both electronic and paper tax returns Jan. 29, paper returns will begin processing later in mid-February as system updates continue. The IRS strongly encourages people to file their tax returns electronically for faster refunds.

The IRS set the Jan. 29 opening date to ensure the security and readiness of key tax processing systems in advance of the opening and to assess the potential impact of tax legislation on 2017 tax returns.

The IRS reminds taxpayers that, by law, the IRS cannot issue refunds claiming the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC) before mid-February. While the IRS will process those returns when received, it cannot issue related refunds before mid-February. The IRS expects the earliest EITC/ACTC related refunds to be available in taxpayer bank accounts or on debit cards starting on Feb. 27, 2018, if they chose direct deposit and there are no other issues with the tax return. 
 
The IRS also reminds taxpayers that they should keep copies of their prior-year tax returns for at least three years. Taxpayers who are using a tax software product for the first time will need their adjusted gross income from their 2016 tax return to file electronically. Taxpayers who are using the same tax software they used last year will not need to enter prior-year information to electronically sign their 2017 tax return. Using an electronic filing PIN is no longer an option. Taxpayers can visit IRS.gov/GetReady for more tips on preparing to file their 2017 tax return.

If you claim the earned income tax credit (EITC) or the additional child tax credit (ACTC) on your tax return, the IRS must hold your refund until at least February 15 — even the portion not associated with EITC or ACTC.

After you file your return, the best way to track your refund is Where's My Refund? or the IRS2Go mobile app.

The IRS is providing help to the victims of Hurricanes Harvey and Irma. Special tax relief and assistance is available to taxpayers in the Presidential Disaster Areas. We are monitoring the situation closely to resolve potential tax administration issues as they are identified. The IRS often updates its information on disaster relief efforts. For the latest news, check the Hurricane Harvey and Hurricanes Irma and Maria information centers frequently.

For information on government-wide efforts related to these natural disasters, please visit: https://www.usa.gov/hurricane-harveyhttps://www.usa.gov/hurricane-irma, and https://www.usa.gov/hurricane-maria.

The IRS participates on the following social media platforms, including:

  • YouTube:  The IRS has video channels that provide short, informative videos on various tax related topics in English, American Sign Language (ASL) and a variety of foreign languages.
  • Twitter:  IRS tweets include various tax-related announcements, news for tax professionals and hiring initiatives.
  • Facebook:  IRS has Facebook pages that post valuable tax information for tax professionals and those needing help in resolving long standing issues with the IRS. 
  • Tumblr:  The IRS Tumblr blog posts important tax information and announcements that link to IRS.gov and YouTube content.

 

This is a reminder that the preparer due diligence requirements were expanded by the PATH Act last year to include the child tax credit and the American Opportunity education credit as well as the earned income tax credit.  This means that under IRS Code section 6695(g) the IRS has the authority to penalize a tax preparer $510 for each return (and for each credit on that return) for which the preparer fails to comply with the due diligence requirements related to these three credits.

The Four Due Diligence Requirements can be summed up as follows:

  • Complete and submit the Form 8867 (Paid Preparers Due Diligence Checklist) whenever the earned income tax credit, child tax credit and/or the American Opportunity Education credit is claimed on a federal return.
  • Complete all necessary worksheets or similar documents showing how each credit was calculated.
  • Knowledge – Know the tax law and ask questions until you have all the information you need to determine eligibility and the correct amount for each of the credits. This means the preparer when evaluating the information provided by the taxpayer should ask additional questions if that information seems incorrect, inconsistent or incomplete. Any additional questions, and the taxpayer’s answers, should be documented and kept with the taxpayer file at the time they are asked.
  • Keep a copy of all of the above, along with a record of how and when you obtained the information to determine eligibility for, and the amount of, the credits. You must also keep a copy of all the documents you reviewed and used to determine eligibility for and the amount of the credits.

It is important to note that preparers need to pay particular attention to meeting the knowledge requirement and be sure that they are asking enough questions to ensure they have enough information to be sure each of these credits is correctly claimed.  Lack of meeting the knowledge requirement is the area where a due diligence penalty is assessed is most cases when the IRS performs a due diligence audit.

For more information, see the Refundable Credit Preparer Due Diligence Law page on the EITC Central website.

For more information on other aspects of due diligence and refundable credits see the following pages on the EITC Central website:

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