The days pass, one after the next… Long, empty days that echo with sound of woeful sighs as the mailman (or his electronic counterpart, the direct deposit elf) refuses to bring your income tax refund. You aren’t alone, patient readers. The Internal Revenue Service is way behind on processing tax returns this year, and we can probably blame that whole fiscal cliff mess.
A new report from the chief market strategist at ConvergEx Group (via the Los Angeles Times) says that through Feb. 3, the IRS only issued about $4.3 billion in refunds. Sounds like a lot, right? Not compared to the $26.9 billion that went out during the same time period in 2012.
Oh and even that wasn’t much as the IRS was dealing with security hassles. Since 2005, the IRS would’ve usually mailed about $30 billion to $40 billion in refunds by now.
The fiscal cliff royally mucked things up at the end of 2012, when Congress was in a bitter standoff about how to avoid going off of it. Because of that, the IRS had to sit and twiddle its thumbs before it could determine exact tax policy and print the appropriate forms.
Returns weren’t even accepted until Jan. 30 from individual taxpayers, while small businesses and others with trickier returns won’t be able to file for a few more weeks while the necessary forms are being prepared.
This could all boil down to a slump for the economy, as we all know, consumers make the world go round — high five — and it’s a lot harder to spend money when you don’t have it. Since more than half of 80 million filers get a refund, that’s a lot of money that won’t be spent.
So as soon as you get your paws on yours, be sure to rush out and treat yourself to something nice, for the economy’s sake.