IRS and sequester cuts - will your tax refund be delayed? - Los Angeles News | FOX 11 LA KTTV

IRS dealing with sequester cuts - will your tax refund be delayed?

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PHOENIX -

Could the sequester reach into your pocket and hold on to your tax refund? There's talk that a chunk of the more than $300 billion in IRS refunds each year could be delayed if the sequester forces the agency to furlough workers.

We spoke to an expert, a local CPA who is also a federally-licensed enrolled agent. He's setting the record straight.

Thanks to the fiscal cliff, tax season this year was off to a rocky and late start. It wasn't until January 29th that the season officially opened.

And just three days ago local CPA's learned how the sequester would affect Arizona taxpayers.

CPA and vice president of the Blau Company, Aaron Blau, received this letter last Friday.

"This Friday marks the effective date of across the board spending cuts for nearly all federal agencies known as sequestration. We will continue to operate under a hiring freeze. We will continue to look for cost savings in the coming weeks and months," said the letter.

It came directly from the acting commissioner of the IRS.

"As a result, if sequestration occurs and our budget is reduced for the remainder of the fiscal year…"

Good news, says Blau, about the pending sequester and tax refunds.

"The sequester won't affect this tax season but these furlough days are going to come into play later on and that's going to affect folks in the collection departments and in the audit departments."

The IRS will endure across the board spending cuts. According to this memo sent to FOX 10 by a department spokesperson, it will operate under a hiring freeze and require employees to take up to seven furlough days. Rumor has it that could mean fewer or delayed audits.

"Now here we are doing taxes and I just want to make sure that I'm dotting every ‘I' and crossing every ‘T' and that I am in compliance with everything that I am doing," says business owner Elaine Boyline.

Boyline, owner of Red Rock Distributors, says cheating isn't an option, sequester or not. And Blau doesn't suggest taking short cuts even if the IRS is making its own cuts.

"The reality is there are still very well-trained IRS agents out there the majority of audits occurring are correspondence audits, they are over the mail anyway, so the furlough days won't really hit the boots on the ground locally here," says Blau.

Blau tells us the letter he received says there won't be any changes, cuts or furloughs until the end of tax season.

A number of people we spoke to today -- valley residents who have already filed -- tell us they have already received their refund.

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