South Jersey tax preparers have been bracing for a shortened tax season, which may mean more hectic schedules and longer waiting times for taxpayers to receive their refunds.
That also means longer days for Bryan Adams, an IRS-certified enrolled agent with Adams & Adams Financial in Pleasantville, who regularly works from 7 a.m. to 11 p.m. during tax season.
“I think I’m going to be putting a couple hours on each end, or put a bed in the back of my office,” he said. “By this date in my office (usually) we’d have 600 returns prepared,” he said in late January. “We’re only a little over a hundred right now. It’s considerable.”
This year’s tax season is a 10th shorter due to delays from congressional wrangling over the so-called fiscal cliff and the American Taxpayer Relief Act enacted Jan. 2.
Tax preparers and accountants are not the only ones affected. While the IRS said it opened filing Jan. 30 for most Americans, some popularly claimed credits and deductions will not be processed until mid-February and March.
These include credits that help offset education expenses such as the American Opportunity Tax Credit and the Lifetime Learning Credit, as well as deductions for depreciation of rental properties and businesses.
“You’re talking an economy, especially in this area, where there’s a huge amount of unemployed and underemployed. I’d say 80 percent of the clients really need that refund,” Adams said.
He said he is giving clients a chance to file their returns now and later amend them to reflect credits not yet available.
The government’s delays pushed everything back, with a glut of work accumulating during a traditionally time-crunched period, said Frank Thomas, a professor of accounting and finance at Richard Stockton College.
“It’s going to be a rough time for accountants,” he said. “The first couple of weeks of February are real busy for firms, and doing the work that’s coming in the first few weeks is going to be difficult because of the jobs you couldn’t get out the door.”
He said he hopes people understand the fault is with government, not tax preparers.
The IRS says more than 60 percent of taxpayers use a preparer.
“I’ve been doing this a good while now, and it was strange this year,” said Kevin O’Neill, a certified public accountant with Gibbons & O’Neill of Cape May.
“We won’t know until after tax season closes up in the middle of April how it really is. It was weird. You go to the seminars to get the updates and they kind of said this is what it’s going to look like but they didn’t know for sure,” O’Neill said.
Yet the delays did produce some positives for some taxpayers, particularly fishermen and farmers, O’Neill said.
Farmers and fishermen who do not make quarterly estimated tax payments typically have to pay the full amount of taxes due by March 1, according to the IRS. That deadline was pushed back to April 15 due to delays in processing the tax forms.
Meanwhile, there was another wrinkle this year regarding regulation of tax preparers — including more than 8,700 in New Jersey — who don’t have the same training as certified public accountants, enrolled agents and attorneys.
The IRS is trying to mandate that this category of tax preparer obtain new credentials, take a $116 exam by Dec. 31, 2013, and take 15 hours of continuing education per year.
But in January, a federal judge ruled the IRS did not have the authority to impose those rules. The agency is appealing.
The libertarian, Arlington, Va.-based Institute for Justice opposed the regulations, saying the new rules and the costs of the education credits would put small tax preparers out of business to the benefit of major tax preparers.
Thomas, the Richard Stockton college professor, said they seemed a reasonable way to help eliminate mistakes by tax preparers who are not subject to the professional rigors like CPAs.
“That seems to be one step backward,” he said. “Taxes are complicated. I spend a lot of time preparing for a new tax season and new semester here at the college. I think it’s inherent in the profession you should devote a certain number of hours to professional certification.”
David Stewart, an IRS spokesman in New Jersey, declined to comment on the stalled regulations.
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