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Sunday, March 24, 2013
WASHINGTON — What would a tax season be without confusion and last-minute changes?
First up, a lot of H&R Block customers are irate about a snafu that will delay their federal tax refunds by weeks.
For days, H&R customers complained on Facebook that they weren’t getting a clear explanation as to why their refunds were being delayed. As it turns out, there was a problem with returns that included Form 8863, which is used to claim two higher education credits — the American Opportunity Tax Credit and the Lifetime Learning Credit.
“H&R Block has confirmed with the IRS that there was an issue with a limited number of software company products that affected some tax returns filed between Feb. 14 and 22, 2013,” the company said in a statement.
The IRS says the glitch has impacted about 10 percent of the 6.6 million total returns claiming the credit. “The problem resulted in those tax returns requiring additional review,” the Internal Revenue Service said.
H&R Block won’t say how many of those returns were prepared by the company, noting that the language in the IRS statement said the problem involved a “limited number of software company products.” Yet it’s been mostly H&R Block customers who are taking to the Internet. A “Demand H&R Block Refund Our Filing Fees” page has been created on Facebook.
“I’m not able to divulge how many of our clients are impacted, but we are contacting them all directly,” H&R Block spokesman Gene King said in an email.
King said any problems that occurred with Form 8863 have been fixed and that H&R Block clients need to take no immediate action.
“It’s important to note that the tax returns were prepared accurately,” he said. “The error occurred in e-file processing.”
The IRS issued an alert to tax professionals Feb. 20, pointing out that they had noticed instances in which certain checkboxes on Form 8863 were not correctly completed, causing processing delays. Software packages needed to be modified to correct the issue, the alert said, adding, “Please communicate this information to the practitioner community to avoid delays in processing returns.”
The IRS said that in a situation like this, it can typically take up to eight weeks to resolve the problem. But the agency is working to speed up the process. However it “may need as much as four to six weeks” to get refunds to taxpayers.
The delay in processing the returns may also affect families applying for financial aid through the Free Application for Federal Student Aid, or FAFSA. If you are impacted, you can enter your tax return information manually and later update it once your return has been processed.
The IRS said taxpayers who filed a Form 8863 with their tax return during the time period in question can check “Where’s My Refund?” on ww.irs.gov. “If taxpayers have not received a refund date and filed during the affected period, they should contact their software provider to determine if they may be in the affected group,” the agency said.
Michelle Singletary is a personal finance columnist for The Washington Post. Her column runs Sunday.
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