Expert Resource: University of Richmond Tax Law Expert Hayes Holderness Says Beware Refund Calculator, Know Extension Rules

Most Americans must file federal income tax returns by next week, April 15. Due to recent changes in tax laws, many people are getting smaller refunds compared to previous years, which can be upsetting as taxpayers often expect a certain tax refund amount.

Hayes Holderness, an assistant professor in the University of Richmond School of Law, is a tax law expert. Holderness, a self-described “tax enthusiast”, cautions taxpayers to beware of the refund calculator on popular do-it-yourself tax websites.

“The refund calculator is a bit of a roller coaster because you start off at one number and then it goes up and down as you continue through the process,” Holderness says. “Studies have shown that regardless of knowing the first number is not the final, many people get the initial number in their head and think their refund will be close to that.”

Holderness says that is problematic for two main reasons. First, it can be upsetting for the taxpayer if the number is lower than they anticipated or if they end up owing tax. Second, there can be a downside in that the experience introduces the temptation for the taxpayer to change their behavior and not report accurately if they notice the number is going down.

“Whether consciously or not, a taxpayer may make mistakes on their return if they notice the amount getting smaller, and that’s problematic,” Holderness says.

Holderness says taxpayers should also make sure they understand any financial obligations if they are filing for an extension.

“Even if you apply for and receive an extension, there may still be an amount you are required to go ahead and pay now or else you will owe interest,” Holderness says.

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