Don’t wait on action on tax bill to file returns, IRS tells taxpayers

Taxpayers should file their returns when they are ready and not wait for Congress to agree on a tax bill, IRS Commissioner Danny Werfel said Friday.

“We urge and encourage taxpayers to file when they’re ready,” Werfel said. “Don’t wait on Congress. If there’s a change that impacts your return, we will make the change, and we will send you the update whether it’s an additional refund or otherwise without you having to take any steps.”

A major change would occur if Congress approved a more expansive child tax credit, as is included in a tax bill that the House Ways and Means Committee approved in a 40–3 vote last week. For the Sec. 24 child tax credit, the proposal would increase the maximum refundable amount per child to $1,800 in tax year 2023, up from the current $1,600 per child.

Congress has many times considered Internal Revenue Code changes either right before filing season or right after it begins, so the IRS has “deep experience in assessing and reviewing” such changes, Werfel said.

“Once a bill has been published, then we can and will implement these tax provisions within weeks after they’re enacted,” he said.

But taxpayers’ original returns must be complete and accurate, he said. For example, while some 23 million workers and families receive the earned income tax credit (EITC) each year, nearly one in five eligible taxpayers do not claim the credit, which averages $2,541, Werfel said.

By law, the IRS cannot issue refunds to taxpayers who claim the EITC until mid-February.

The IRS expects over 146 million households will file tax returns for the 2023 tax year, Werfel said.

— To comment on this article or to suggest an idea for another article, contact Martha Waggoner at Martha.Waggoner@aicpa-cima.com.