Normally when you file your taxes whatever money is owed back to you is quickly repaid. The process of getting your money back has been made even quicker in recent years through the use of E-file and direct deposit of Federal tax rebates. But starting in 2015 Federal tax refunds for the 2014 fiscal year are going to take longer for Americans to receive. A lot longer.
The deadline to have your Federal taxes filed will remain April 15th, but under new directives issued to the IRS no refunds are to be issued before October 15th, 2015. This means that early filers who normally receive their refunds around the beginning of February will have to wait an additional 7 months longer than normal to get the money owed to them.
The directive to delay tax refunds is being championed by the Obama administration, which claims that the measure will save the Federal Government billions of dollars. Every year the Federal Government returns around 350 billion dollars of what it has collected. By withholding repayment until October the Government stands to save an estimated 30 billion dollars on borrowing costs and additional interest generated from the withheld funds.
The change is not to be applied equally though. The new rebate delay only affects those who have filled for individual income tax and payroll tax refunds. Large corporations and small businesses will still be eligible to receive whatever tax is owed to them by the Federal Government within normal historic timeframes.
White House Press Secretary Josh Earnest defended the upcoming changes to IRS tax refund policy. “It’s a minor cost saving measure initiated by the administration with bipartisan support”, said Earnest. “The recommendation to initiate this new refund structure came out of the Committee On Ways And Means, under the leadership of Republican Congressman David Camp. Absolutely zero dollars are going to be kept that is owed to hardworking Americans. All you are seeing here is a policy change streamlining the way in which the IRS structures tax refund repayments. Americans who find this objectionable can always opt to bring their tax withholding more in line with the actual taxes they will owe in the future.”
Senator Rand Paul was highly critical of the upcoming change, calling it “another heinous example of the Obama administrations misguided overreach, and the peril of a constantly growing Government”. Senator John McCain also chimed in, stating that “even though the change will save money and contribute toward reducing the deficit, it does it unfairly on the backs of working Americans”.
Indeed, many Americans have come to rely on the yearly refund they receive from the IRS: planning repairs, vacations and major purchases around it. But starting next year all those plans and purchases will have to be pushed back. The checks won’t be cut until October, whether we like it or not.
Source: National Report