January 5, 2017
We’re here today to let everyone know about some important changes for the upcoming tax filing season, which begins in just a couple of weeks. We also want to take this opportunity to remind taxpayers of what they need to do to protect themselves from identity theft as they get ready to file their return. As part of the Security Summit effort, I’m delighted to be joined today by representatives of the states, tax professionals, the software industry, and consumer organizations. I want to thank them for taking the time to participate in this call.
Our message to taxpayers today is simple: this tax season, it’s more important than ever to plan ahead. There are some important changes this year, and we want taxpayers to be ready.
Here are a few key details about this year’s filing season. This year, the IRS will begin accepting electronically filed returns on January 23rd.
We expect to see more than 153 million individual tax returns filed in 2017. And more than 80 percent will be prepared electronically using tax return preparation software. Remember that if you’re e-filing, you can still submit your return to your software provider before January 23rd. They will hold the return and transmit it to the IRS when our systems open. You also don’t have to wait until Jan. 23 to contact your tax professional.
In addition, I want to remind everyone that next week we will open the Free File program. Free File, which is a joint effort between the IRS and the private-sector Free File alliance, is available to anyone with income below $64,000. We’ll have more details on Free File soon, so stay tuned.
So let’s talk about something everyone likes: Tax refunds.
Last year, the IRS issued almost 111 million refunds. That amounted to about 73 percent of all returns. For many people, this is the biggest check they see all year. Last year the average refund was $2,857, and we expect to be in that ballpark again this year.
This filing season, one of the biggest changes involves taxpayer returns claiming the Earned Income Tax Credit or the Additional Child Tax Credit. In an effort to make it easier for the IRS to detect and prevent refund fraud, Congress passed a new law that requires the IRS to hold refunds claiming those credits until February 15th. But this doesn’t mean you should wait to file until then. Taxpayers claiming the EITC or ACTC should file as soon as they have all of the necessary documentation together to prepare an accurate return. In other words, file as you normally do.
We know how important these refunds are. So I have some really important information for EITC and ACTC filers.
The IRS will begin releasing refunds claiming these credits the week of February 15th, but it takes time for these to work through the financial system. With weekends and Presidents’ Day, EITC and ACTC filers should not expect to have access to their refunds via their bank or financial institution before the week of February 27th. And here’s another important point. In February, everyone loves checking our online tool, Where’s My Refund. EITC and ACTC filers should keep in mind they won’t see an arrival date for their refund until after February 15th. So don’t panic in late January and mid-February if you don’t see a refund date on Where's My Refund – that’s just how the tool will operate given the special circumstances with EITC and ACTC refunds.
I also want to note that the Where’s My Refund tool on IRS.gov is the fastest way to get the most up-to-date information on the status of a tax refund. EITC and ACTC refund filers don’t need to call to check on their refund date. What you have on Where’s My Refund is the same information our telephone assistors, the tax professionals and the software companies have. No matter what you may see on the Internet, there’s no secret way to find the refund date in advance.
But there is a special trick to speed refunds some people still miss. That’s choosing direct deposit. About 80 percent of refund filers chose direct deposit last year. Having a check mailed to you will add several weeks, due to the additional paper processing involved.
Another important change this filing season affects taxpayers who use Individual Taxpayer Identification Numbers, or ITINs, instead of Social Security numbers on their tax returns. Beginning this week, any ITIN not used at least once on a tax return in the past three years will no longer be valid for use on a return. Plus, ITINs with middle digits 78 or 79 also have expired as of January 1st. So if you have an expiring ITIN and need to file a return in 2017, it’s extremely important to renew your ITIN as soon as possible.
Here’s why it’s critical not to delay: It can take seven weeks or more from the time you send in Form W-7, the renewal application, for the IRS to process the application and notify you about your status. Those who fail to renew before filing a tax return could face a delayed refund, and they may be ineligible for some important tax credits.
So I would urge people to file that renewal application right away, to avoid any delays. For more information, and to get answers to frequently asked questions, visit our ITIN page on IRS.gov.
I also have an important reminder for taxpayers filing electronically. If you’re changing tax software products this filing season, make sure you have a copy of your prior-year return on hand. You may be asked to enter your 2015 adjusted gross income. This helps verify your identity before you e-file. We’re no longer offering the Electronic Filing Personal Identification Number, or e-File PIN, as an alternative. So, plan ahead and locate last year’s return.
I also want to mention that everyone has a few extra days to file their return this year. The 2017 filing deadline is Tuesday, April 18th. That’s because April 15th falls on a Saturday. Plus, Emancipation Day — a legal holiday in the District of Columbia — will be observed on Monday the 17th, which pushes the filing deadline for the entire country to the 18th.
This year, as in the past, the IRS will be doing everything possible to help taxpayers file their taxes accurately and on time. We hope to maintain the improved level of service we had on our toll-free taxpayer help lines last year. But I want to caution that we do expect our phone lines to be extremely busy again this filing season, and there will be wait times.
With that in mind, here’s an important tip: Using our website, IRS.gov, remains the best and quickest way for people to get information. Everyone should take full advantage of the wide array of tools and information there. Tax software and tax professionals also are incredible resources for people as well.
Finally, I want to mention that the IRS continues working with the tax industry and the states to keep strengthening our processing systems and protecting taxpayers from identity theft and refund fraud.
We have new safeguards in place for 2017 to help stop identity thieves. I want to thank all of our Security Summit partners for the critical work they have done to protect taxpayers and the tax system.
I also want to thank the entire IRS workforce for everything they do, year in and year out, to make sure we are ready for the nation’s tax filing season. Our employees remain dedicated to serving the American taxpayer, and they will continue doing all they can to help everyone during this busy time.