Traders puzzled by the weaker than expected January retail sales, reported yesterday, might have a partial answer from Deutsche Bank's Joe LaVorgna, who in a note to clients said the IRS delay in processing federal tax refunds may have been a contributor, though he notes its ultimate impact was likely minor.
"The IRS released a statement on January 20 stating that the agency would not be able to begin processing most returns until February 14 due to the need to update their infrastructure for the latest tax cut extensions passed by Congress in December," LaVorgna said.
"Ironically, while the IRS delayed the processing of returns by over a month, tax payers only have a three day reprieve-until April 18th, to file their returns."
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