What to know about the child tax credit, the right time to file, and a new IRS pilot program, according to a Philly-area tax expert

It’s officially tax season, Philly.

If you haven’t been paying attention, or have been actively putting off the process of preparing your return, you still have two months to do so.

But before you file, you may want to check on a few things, including the status of a $78 billion tax cut package: The Tax Relief for American Families and Workers Act would expand the child tax credit for some lower-income families and also enhance some tax credits for businesses. The bill passed the U.S. House last month with bipartisan support, but as of late last week it was unclear whether it would get enough support in the Senate.

If you’ve had any major professional or personal changes this past year, you also probably want to assess whether your typical tax return preparation process still makes sense. And you may also see a smaller refund this year.

To help taxpayers navigate this tax season, we talked to Leslie Book, a Villanova University law professor, former professor-in-residence with the IRS Taxpayer Advocate Service, and a national authority on tax authority and administration.

The following interview has been edited and condensed for clarity.

The IRS has been digging out of its correspondence backlog and its return-processing backlog, so service in general is better. One of the challenges this year is that Congress is considering some retroactive changes which might have an impact on many taxpayers including possible changes to the child tax credit.

People should not wait on Congress. People should file their return. And any changes that Congress might make that might be retroactive, for the vast majority of Americans, the changes would be implemented automatically. They would not necessitate filing an amended return.

» READ MORE: Here are 2023′s tax filing deadlines, late penalties, and tax code changes for Pennsylvanians

What I think the IRS will do is process the return as filed, and then implement any retroactive changes later. So it wouldn’t delay the initial receipt of a refund. It would just trigger an additional payment, if there was someone, for example, who would benefit from an expanded child tax credit.

It certainly puts additional pressure on the IRS when Congress makes retroactive tax law changes. It means that the IRS has to get busy and kind of retool some of the things it has in place. Having said that, I think the IRS is well-equipped to deal with the vast majority of individual tax returns, no matter what Congress does.

This is potentially one of the biggest developments in tax administration in my professional lifetime. Most other taxpayers in developed countries have the opportunity to either have a return prepared for them by their tax authority, or they have access to a portal such as what the IRS is experimenting with. Unfortunately, the current plan is a pilot plan, so only taxpayers who are residents of 12 states are eligible. Pennsylvania is not one of the eligible states [Neither is New Jersey nor Delaware].

The IRS does promote the partnership called Free File. Direct File is this experimental portal. Free File is the arrangement the IRS has with software providers. That has been controversial because it’s underused, and some of the providers, including Intuit which pulled out, have been criticized, sued, and sanctioned for improper practices, in terms of steering taxpayers away from truly free products. This Direct File is something that I’m hopeful in the next year or two will be expanded and made available to taxpayers throughout the country.

100%. The Direct File, the pilot, is not a Band-Aid. It’s basically creating an option for taxpayers who want to go directly through the IRS for filing online.

Part of the problem that many Americans face is that the process for filing tax returns in the U.S. is not as transparent and user-friendly as it is in other more-developed countries. So one of the things to think about is: What is the best route for you in terms of preparing and filing a tax return? There are many options including paid return preparers, software, volunteer free preparers, and even free software that’s available.

While our tax system is generally complex, for most people who have few sources of income or income that is from a single employer, it’s a fairly straightforward proposition in filing a current return. That is different from someone who may work multiple gig jobs or is starting a new business. They may be unclear about some of the things that are available to them as they start in a new business in terms of what may be deductible, whether something can be expensed or has to be depreciated or deducted over time. So for someone who is changing their job or changing their business that’s an area where — you don’t need to have a paid preparer — but that’s an area where there’s more complexity. You can find out the answers yourself, or you may look to someone who is capable and competent.

In our country there’s no barrier to hanging up a shingle and being a paid return preparer. There are some red flags. If someone is offering to prepare the return but doesn’t want to sign the return, that’s an issue. Or someone who doesn’t share with you or explain what they’re doing with the return, and is asking you to sign something without reviewing, that is a red flag. I should also add that a lot of software options that are available do provide a kind of meaningful walk-through for people and would allow them to prepare and file correct tax returns. There’s a multichannel approach for filing taxes in this country so there is no one-size fits all.