WASHINGTON - Following the January tax law changes made by Congress under the American Taxpayer Relief Act (ATRA), the Internal Revenue Service announced today it plans to open the 2013 filing season and begin processing individual income tax returns on Jan. 30.

The IRS will begin accepting tax returns on that date after updating forms and completing programming and testing of its processing systems. This will reflect the bulk of the late tax law changes enacted Jan. 2. The announcement means that the vast majority of tax filers -- more than 120 million households -- should be able to start filing tax returns starting Jan 30.

The IRS estimates that remaining households will be able to start filing in late February or into March because of the need for more extensive form and processing systems changes. This group includes people claiming residential energy credits, depreciation of property or general business credits. Most of those in this group file more complex tax returns and typically file closer to the April 15 deadline or obtain an extension.

“We have worked hard to open tax season as soon as possible,” IRS Acting Commissioner Steven T. Miller said. “This date ensures we have the time we need to update and test our processing systems.”

The IRS will not process paper tax returns before the anticipated Jan. 30 opening date. There is no advantage to filing on paper before the opening date, and taxpayers will receive their tax refunds much faster by using e-file with direct deposit.

“The best option for taxpayers is to file electronically,” Miller said.

The opening of the filing season follows passage by Congress of an extensive set of tax changes in ATRA on Jan. 1, 2013, with many affecting tax returns for 2012. While the IRS worked to anticipate the late tax law changes as much as possible, the final law required that the IRS update forms and instructions as well as make critical processing system adjustments before it can begin accepting tax returns.

The IRS originally planned to open electronic filing this year on Jan. 22; more than 80 percent of taxpayers filed electronically last year.

Who Can File Starting Jan. 30?

The IRS anticipates that the vast majority of all taxpayers can file starting Jan. 30, regardless of whether they file electronically or on paper. The IRS will be able to accept tax returns affected by the late Alternative Minimum Tax (AMT) patch as well as the three major “extender” provisions for people claiming the state and local sales tax deduction, higher education tuition and fees deduction and educator expenses deduction.

Who Can’t File Until Later?

There are several forms affected by the late legislation that require more extensive programming and testing of IRS systems. The IRS hopes to begin accepting tax returns including these tax forms between late February and into March; a specific date will be announced in the near future.

The key forms that require more extensive programming changes include Form 5695 (Residential Energy Credits), Form 4562 (Depreciation and Amortization) and Form 3800 (General Business Credit). A full listing of the forms that won’t be accepted until later is available on IRS.gov.

As part of this effort, the IRS will be working closely with the tax software industry and tax professional community to minimize delays and ensure as smooth a tax season as possible under the circumstances.

Updated information will be posted on IRS.gov.

Authorized IRS e-file Providers must not submit electronic returns to the IRS prior to the receipt of all Forms W-2, W-2G, and 1099-R from the taxpayers.

If taxpayers are unable to secure and provide a correct Form W-2, W-2G, or 1099-R, Providers may submit the electronic return only after securing Form 4852, Substitute for Form W-2, Wage and Tax Statement, or Form 1099-R, Insurance Contracts, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs etc. in accordance with the use of that form. This is the only time Providers should submit an electronic return with information from pay stubs or Leave and Earning Statements (LES).

Compliance Monitoring

The IRS monitors Authorized IRS e-file Providers for compliance with this and other IRS e-file rules and requirements. The IRS may conduct monitoring visits to ensure compliance with Revenue Procedure 2007-40 and with IRS e-file rules and requirements included in IRS e-file publications.

Sanctions

The IRS may warn or sanction Providers that violate IRS e-file rules and requirements. Sanctions may be a written reprimand, suspension of one to two years or expulsion from participation from IRS e-file depending on the seriousness of the infraction. Providers may appeal sanctions through the Administrative Review Process. Additional information regarding sanctioning is available at IRS.gov in Publication 3112, IRS e-file Application and Participation.

The Modernized e-File (MeF) System successfully opened this morning at 9:00 am, Eastern Standard Time (January 7, 2013) and is now operational for the following Business Tax Returns:

o Fiscal year returns with a year ending prior to 12/31/2012
o All 2011 tax year and 2012 fiscal year business returns, including Form 1120 series
o 2012 tax year Form 2290, Heavy Highway Vehicle Use Tax Return
o 2012 tax year Form 7004, Application for Automatic Extension of Time to File Certain Business Income Tax, Information and Other Returns
o Form 8868, Application for Extension of Time To File an Exempt Organization Return (omitted from previous listing)

We will share additional information when we can accept the remaining Tax Year 2012 Business forms as soon as it becomes available.

Note:  Please use https://la.www4.irs.gov/a2a/mef/  for ATS and Production returns. You should only use https://la.alt.www4.irs.gov/a2a/mef/  for troubleshooting when advised by IRS to do so.

The IRS continues to review the details and impact of the new tax law signed this week, but a number of these provisions will require changing forms and updating our processing systems involving non-1040 business returns. As a result, electronic filing of many business returns will be delayed while we update forms, related instructions and corresponding systems. This delay is not expected to significantly impact business filers since most of these returns with reporting periods ending Dec. 31, 2012, are not due until March or April 2013, depending on the form.

The IRS will not accept these business tax returns for processing through MeF at this time*:
§ All 2012 tax year business forms (other than Forms 2290 and 7004)
§ Form 8849, Schedule 3 - Certain Fuel Mixtures and the Alternative Fuel Credit
§ Form 990 series (Tax Exempt tax returns)

Beginning Jan. 7, 2013, the IRS will accept these forms for processing through MeF:
§ Fiscal year returns with a year ending prior to 12/31/2012
§ All 2011 tax year and 2012 fiscal year business returns, including Form 1120 series
§ 2012 tax year Form 2290, Heavy Highway Vehicle Use Tax Return
§ 2012 tax year Form 7004, Application for Automatic Extension of Time to File Certain Business Income Tax, Information and Other Returns

We will share additional information on when we can accept the remaining 2012 tax year business forms as soon as it becomes available. More information will also be available soon regarding 2012 individual 1040 tax returns impacted by this week’s legislation.

* Note: Business tax returns not processable through MeF at this time will also not be processed if submitted on paper.

The Internal Revenue Service released updated income-tax withholding tables for 2013 reflecting this week’s changes by Congress.

ATTN: Software Developers, Return Transmitters and Authorized IRS e-file Providers/EROs

IRS has posted Frequently Asked Questions (FAQs) to help Authorized IRS e-file Providers (Providers) understand the correct usage of Electronic Filing Identification Numbers (EFINs).  Providers must ensure that they are using their correct EFIN.

When a Provider is doing business with another Provider, you must check to see that the other Provider also has a valid EFIN.

In addition to the previously announced CAF outage from December 26 to 6:00 AM January 2, the e-Services’ Transcript Delivery System, Disclosure Authorization and Electronic Account Resolution systems will be out three additional business days. They should return to operation Sunday, January 6, 2013.

Please remind your clients, age 70½ or older to take their 2012 required minimum distributions (RMD) by Dec. 31 or April 1, 2013, if they were 70½ in 2012, to avoid the 50 percent excise tax on any amount of an RMD they do not take on time.

Additionally, if they have exceeded the 2012 IRA contribution limit, they may withdraw excess contributions from their accounts by the due date of their tax returns (including extensions). Otherwise, they must pay a 6 percent tax each year on the excess amounts remaining in their account.

Go to the RMD page on IRS.gov for more information.

The IRS is taking several steps to improve taxpayers' ability to understand their refund status in 2013. To begin with, taxpayers will get a personalized refund date when they use Where’s My Refund? and the tool will have a new look. Where’s My Refund? will include a tracker that displays progress through 3 stages: (1) Return Received, (2) Refund Approved and (3) Refund Sent along with narrative that provides more detail such as the approved refund amount and the date the refund will be sent. Taxpayers will also be able to check on the status of their return sooner - within 24 hours after we’ve received an e-filed return or 4 weeks after a paper return is mailed.

Where’s My Refund? will provide a refund date as soon as the IRS processes the tax return and approves the refund. This means taxpayers won’t get an estimated refund date right away. Instead Where’s My Refund? will give each taxpayer personalized refund information based on the processing of his or her own tax return.

The IRS issued more than 9 out of 10 refunds to taxpayers in less than 21 days last year. The same results are expected in 2013.

The Publication 2043, previously the Refund Cycle Chart, has been re-purposed as IRS Refund Information Guidelines for the Tax Preparation Community. The new "What to expect for refunds in 2013" page on IRS.gov includes official IRS 2013 refund communications, including
Publication 2043, to help you prepare for the filing season.  

• Pub 2043: IRS Refund Information Guidelines for the Tax Preparation Community
  Tax Tip SETT-2012-13 - Season of Giving Tips
  Video: When will I get my refund?

Reminder: Any claims by Providers concerning faster refunds by virtue of electronic filing must be consistent with the language in official IRS publications. Per the advertising standards in Publication 3112, IRS e-file Applications and Participation, and Publication 1345, Handbook for Authorized IRS e-file Providers of Individual Income Tax, providers must not use improper or misleading advertising in relation to IRS e-file, including the time frames for refunds or other financial products. This reminder serves as the IRS’s request to the tax preparation community to follow these messaging guidelines. The IRS will monitor Industry practice during filing season, but anticipates and expects voluntary compliance from its partners in support of this important effort to help taxpayers understand their refund status.

The recent webinar, Circular 230 Overview: Key Provisions and Responsibilities for Tax Professionals, will be rebroadcast on Jan. 29, 2013. Sign up now.