IRS Blasts Out Refund Checks
According to those in the know, record snowstorms and IRS computer hardware crashes have led to one of the most eventful and unpredictable tax seasons in many years.
The IRS eFile system actually started a few days earlier than last year, according to Bill Neylan of Tax Max, whose company prepares tens of thousands of car dealership customer tax returns annually. "The eFile season has been starting in the January 21st to 24th range in the past few years. But in 2016, we were in a live environment on January 19th. This gets us closer to the pre-2014 expectations of having the IRS going live nearer to January 15th."
With the earlier start came expectations of earlier refund checks. "Many of our software partners estimated refunds to be disbursed between January 22nd and January 29th this year" stated Neylan. But mother nature had other ideas.
Major snowfall of 1 to 2 feet or more struck Washington D.C. and Philadelphia, homes to a pair of the major IRS processing centers. The nation's capital came to a standstill for nearly an entire work week.
Early in the afternoon of Wednesday, February 3rd, in the middle of the 2nd busiest week of the Tax Refund Filing Season, the IRS stopped responding to eFile providers. It was a hardware outage that was to blame.
"Several of our systems are not currently operating, including our modernized e-file system and a number of other related systems,” the IRS said in a statement. "IRS.gov remains available, although a number of the services on the site are not, including Where's My Refund."
To soften the blow, the IRS stated on Twitter, "nine out of 10 taxpayers will receive their refunds within 21 days."
Once the dust settled, funding began to 'trickle in' according to Neylan of Tax Max. "It was almost as if the IRS was testing their new hardware by releasing 1 in 200 of the returns that were awaiting refunds."
"After recovering from the weather and hardware delays, along came February 10th ... the largest IRS funding we have seen in our 21 year history! That day was so hectic for everyone, it seems like it was months ago" recalls Neylan.
From individual tax preparers to the banks that process the incoming IRS refunds, the tune was the same. The volume of money coming from the United States Treasury was more than double that of any day in recent memory.
So what is next?
The next big paydays are expected to be Thursday, February 18th and the following two Wednesdays (February 24 and March 2). After that, it will be nearly over.
"Money will still keep coming to tax filers after March 2nd, just not at the same volume as before" anticipates Neylan.
The reason is that Americans who rely on their tax refunds to buy cars, pay bills, satisfy delinquencies, and get their lives caught up tend to file as soon as their W-2 forms arrive. Few wait until March to file when the bill collectors are calling, the landlord is threatening, and the weather is less friendly at the bus stop.
So if you have delinquent accounts or customers waiting on their tax refunds to buy from you ... ACT NOW!!!
According to Tax Max, 90-95% of the special finance market has already filed their taxes. Half of the refund money will be spent and gone this week. Nearly all of it will be gone by early March.
Follow up with your delinquencies. Call your sales leads "waiting on refunds." Make your final efforts to capitalize on the 2016 tax refund season, because once St. Patrick's Day hits, it is time to start planning for the next phase of the 12-month tax season.
For more information regarding Tax Max, including their Irregular Payments Program, visit TaxMax.com or call them at 866-642-4107.