LITTLE ROCK — Dear Taxpayer:

As you know, President Barack Obama and Congress played chicken over mandated tax increases and spending cuts.

Both swerved.

Fears of another recession dissipated.

But that’s not the whole story.

Because of the 13th-hour fix, federal tax refunds will be delayed.

If you have a refund coming, that’s a mixed blessing.

Your grumpy uncle has told you over and over: “If you got money coming back, you made a no-interest loan to the government - both federal and state.”

Arkansas is one of 43 states that tax individual income.Neighboring Texas and Tennessee don’t.

States can make some decisions on their own. But they don’t operate in a vacuum. They are part of the Union.

The fact is, most people file their federal and state (if applicable) income tax returns at the same time.

So if the federal government says your refund will be late, it probably means the same for your state refund.

“Typically, folks don’t file their state return until they file their federal. They file them together, especially if they are using a paid preparer or if they’re using tax software that will prepare the returns and transmit both at the same time,” said John Theis, assistant revenue commissioner for Arkansas.

The Internal Revenue Service decided it will not begin accepting returns until Wednesday so it could get its forms and tables updated to accommodate the late legislation.

I asked Theis what’s to stop Arkansas taxpayers from filing their state return and not waiting for the federal start date?

Nothing, as long as you don’t file electronically or use a paid tax preparer who does, he says.

In other words, use the old fashioned system of putting pen (after you do the pencil draft, which is my routine) to paper.

You could drop a paper return in the mailbox today, but because of the speed of the electronic filing, the advantage would be negligible, Theis says.

Either way, it seems the government wins. It gets to keep your hard-earned money that much longer.

Paul Louthian, administrator for the Office of Accounting for the Arkansas Department of Finance and Administration, said the time that refunds remain in state hands would be of negligible benefit to government.

But to the typical taxpayer in our poor state, it does make a difference. People count on getting their refunds. They want to know when the money will hit their checking accounts or checks will arrive in their mailboxes.

Surprise.

Things are not going that smoothly in getting the forms out to tax preparers, according to Ann Hickerson, co-owner of Heartland Tax at 3612 John F. Kennedy Blvd. in North Little Rock.

Word in her circle is that the IRS may not have some itemization forms available until mid-February.

And the IRS is not providing target dates by which taxpayers can expect receipt of refunds, Hickerson said.

“It’s making [customers] really irritated,” Hickerson said. “It’s causing lots of hairy problems.”

Well, there you go. Hang in there.

Signed,

Uncle Grumpy

If you have a tip, call Jack Weatherly at (501) 378-3518 or e-mail him at

[email protected]

Business, Pages 61 on 01/27/2013