IRS e-filing opens amid late tax law changes

The Internal Revenue Service began processing tax returns for 2010 on Friday, but Uncle Sam will need some extra time to handle returns using deductions altered by Congress in the waning days of 2010.

David Williams, a senior IRS executive, said the IRS probably won't be able to process returns involving itemized deductions or certain education credits until mid-February. Blame the delay on the 111th Congress, which didn't decide on key provisions of the Bush tax cuts until days before they were set to expire at the end of 2010.

"We still need to make some programming changes to accommodate the changes in the tax legislation Congress adopted in late December," he said.

IRS spokesman Dan Boone said among the 2.6 million Tennesseans expected to file tax returns this year, about 166,000 are expected to itemize deductions using Schedule A or take advantage of the tuition or education tax credits.

Chattanoogans eager to get their tax returns began coming into tax preparation offices a couple of weeks ago, although Friday was the first day that individuals and tax preparers could e-file returns on the Web.

"We've had a lot of people starting to come in already, but our big rush usually comes in the next few weeks once employees get their W-2s," said Kathy Sweezy, a manager for one of four Jackson Hewitt tax offices that opened this month in Chattanooga.

The IRS' Boone said the busiest times for the agency are in early February and just ahead of the tax deadline in April.

"Once people get their W-2 income statements at the end of January, most people who are going to get a refund want to file quickly in early February," he said. "For those not getting a refund, we get most of the returns filed in April."

This year for the first time, the IRS is no longer mailing out paper forms to taxpayers who have filed with paper returns in the past. Such forms may be downloaded from the IRS website, picked up at local libraries and IRS offices or requested from the IRS via phone, 1-800-TAX-FORM.

Last year, about three of every four taxpayers in Tennessee and Georgia filed returns electronically.

Taxpayers who wait to file their 2010 returns will have an extra three days this year because of a holiday in the District of Columbia and a weekend before the normal April 15 deadline. As a result, this year's deadline is April 18.