Kudos to the IRS ...

... for once again doing the best to deal with an increasingly messy tax code and Congressional procrastination.

Our VITA site opened this week and our first batch of efiles have been promptly acknowledged. Year in and year out, we efile 99% of the tax returns my students prepare, and taxpayers generally get their refunds direct deposited within 10 to 14 days of visiting us. (If they request a mailed check rather than direct deposit, you can add an additional 10 days or so.) Modernized efile may further speed up those numbers, but TaxWise will not be allowing Modernized Efile for a few more weeks.

However, there are still a few exceptions to the near-universal efiling which we experience at our site.

1) Taxpayers who want to claim homebuyer credits on Form 5405 must still file paper returns, because they need to attach documents providing acceptable evidence that they did, in fact, buy a home qualifying for the credit. David Williams, IRS Director of Electronic Filing and Refundable Credits, says that--within a few years--efiles will be able to include PDF attachments, but we are not yet there.

2) Some efiles are rejected due to the fact that another tax return has already claimed the same Social Security Number (SSN) that our taxpayers claimed. Important note: for privacy reasons, the IRS will NOT reveal the name of the other taxpayer who has claimed you or your dependent on their return. The IRS will only inform you that the same SSN has already been claimed on a different taxpayer's return.

In those cases, the taxpayers' only option to secure the refund to which they are rightfully entitled is to file a paper return, and eventually the IRS will contact them to get the information they need to sort it out.

Eventually, the rightful taxpayers will get the refund to which they are entitled. If the delay is very lengthy, they may also get a small amount of interest to partially compensate for the delay.

The speedy taxpayers who beat the rightful taxpayers to the punch and collected refunds to which they were not entitled will be required to pay back those wrongful refunds--plus interest and possibly substantial penalties, especially if there is clear evidence of fraudulent intent and/or serious negligence on the part of the wrongfully-filing taxpayer.