Last-minute filers hustle to beat Wednesday's deadline
Tax Day 2015 dawns with Metro Detroiters of all stripes ready to be done hassling with their returns.
First, there were late rules from Congress that delayed the opening of tax-filing season. Then a raft of taxpayers found fraudulent returns had been filed in their names. The IRS stopped accepting some returns done with TurboTax software for a while, but another federal agency managed to send out incorrect tax forms of its own. Finally, there was confusion about who owed what under the rules of the new Affordable Care Act requirements, while an understaffed IRS struggled to answer questions from baffled taxpayers.
And, with fully one-third of all expected returns still unfiled as of April 3, plenty of people were starting way too late.
"Monday was a tough day," sighed Vince Mattina Jr., a CPA and managing partner of Mattina, Kent & Gibbons, P.C., in Rochester. As of Tuesday morning, he said, "It's going well so far, but as the day gets on, it's going to get even more hectic. For the most part, it's clients who are showing up late with their documents."
And showing up early, too. Gary Winston opened his Liberty Tax Service office on Livernois near University of Detroit Mercy at 6 a.m. "If they keep coming in, I'll be here until midnight," Winston said, noting that some Liberty franchises stay open 24 hours as the tax deadline draws near.
With business up 50 percent so far, Winston said he finds two parts to tax season. In January, many taxpayers are filing to claim the Earned Income Credit, the refundable tax credit that pays refunds to low-wage workers. Then, as April 15 draws near, his clients are those with more complicated returns who are likely to owe taxes.
One client Tuesday afternoon was Kalvin Kinsey of Southfield. The 39-year-old Chrsylser production worker got good news and bad news: He owed a bit to the city of Detroit, but got state and federal refunds.
"Owing the city is better than owing on federal or state," Kinsey said, adding that his refund will go to a savings account for his son.
In downtown Detroit, more than three dozen taxpayers looking for free help Tuesday filled the 11th-floor office of the IRS Taxpayer Assistance Center on Woodward Avenue. That included Brenda Little of Detroit, who was there to clear up a previous tax problem. Arriving at 10 a.m., she was still waiting at 2:30 p.m. when she finally got a number to see a tax specialist. Earlier in the day, she said, taxpayers were turned away and told to return Wednesday.
"I feel like they just need more people," Little said.
IRS Commissioner John Koskinen agrees. A week ago, Koskinen told the Tax Policy Center that after budget cuts of $1.2 billion and the loss of 13,000 employees, the agency is now at the point where the majority of taxpayer calls asking for help will go ignored this year.
"Our phone level of service at the start of the filing season was just 54 percent," Koskinen said. "As we have gotten closer to the end of filing season, it has dipped below 40 percent. That means more than six out of every 10 people who called could not reach a live (helper)."
And this year, taxpayers had lots of questions, starting with concerns about the Affordable Care Act, or Obamacare. This is the first year that the IRS is enforcing the requirement to obtain insurance or pay a tax penalty. For most of the 150 million tax filers who have employer-provided coverage, it's a non-issue, said IRS spokesman Luis D. Garcia.
"The vast majority of filers simply checked a box," he noted.
However, the Kaiser Family Foundation estimates that 4.5 million to 7.5 million households will have to account for subsidies paid in 2014, with 45 percent receiving refunds averaging $773 and half of those households owing an average of $794. In addition, 800,000 taxpayers received incorrect tax statements about their ACA subsidies from the federal Centers for Medicare and Medicaid Services.
Other taxpayers filed their returns only to find that identity thieves had already claimed bogus refunds. The problem occurred with state and federal returns, and requires taxpayers to file paper returns that will take another three months to process.
"As far as the fraud goes, its getting much worse," said Jim McIntyre, a partner with the accounting firm Fenner, Melstrom & Dooling, PLC in Birmingham. Just on state tax returns, he added, "There's easily 50 of our clients who got that letter."
On the plus side, there are a number of Tax Day freebies being offered to ease the pain of filing, including free pizza. The best apart: you don't even need to report it to the IRS.
boconnor@detroitnews.com
(313) 222-2145
Tax Day freebies
■Pizza Hut is celebrating Tax Day with its first-ever "Pizza Return." To become eligible to win a Pizza Hut gift card ranging from $10 to $50, customers fill out a form at pizzareturn.com. On it, they must note whether they are "married ordering separately" and list dependents, which can include "degenerate friends" and "my 4:00 am self." Entries have to be printed, mailed in and postmarked no later than April 18. A random drawing will be done around April 21.
■Boston Market is offering a buy one, get one free deal on April 15 at its 450 restaurants nationwide. Buy one individual meal (a main, two classic sides, and cornbread) for $10.99 and get the next one free. No coupon needed.
■Book by Wednesday with Royal Caribbean International and the cruise line will pay cruise taxes, port charges, and fees for vacationers who reserve cruises of six nights or longer to the Bahamas, the Caribbean, or round-trip to Europe. It adds up to a $200 savings, according to the company.
SOURCE: Bloomberg