IRS to Delay Tax Refunds Involving EITC and ACTC Next Year

[Elrod]

The Internal Revenue Service is warning tax professionals that next year, a new law will require the IRS to hold all Earned Income Tax Credit and Additional Child Tax Credit refunds until Feb. 15 as a safeguard against identity theft and tax fraud.

The correct address to the article: http://www.accountingtoday.com/news/tax-practice/irs-to-delay-tax-refunds-involving-eitc-and-actc-next-year-78387-1.html

Edited June 16, 2016 by jklcpa
Include explanatory text from orig. post, changed title. Deleted orig post with faulty link.

[Abby Normal]

I approve. Hope it helps.

[Terry D EA]

I agree with the additional needed regulation and scrutiny. However, the big tax mills will see this as another opportunity to loan money to folks at a ridiculous interest rate which due to the longer IRS processing, will increase the fees for those loans. For them it is win win but total loss for the taxpayer who seeks their services.

[David1980]

It could help with those taxpayers that want to file a return as soon as possible to get their refunds as soon as possible. Once they understand that they're not getting a refund prior to 2/15 at any rate. Right now they try and file as soon as they can and often that means W-2 and 1099 for small jobs and the such that they forgot about being received after they've filed a return. Really 2/15 isn't all that much of a delay - a couple weeks later than normal?

[Jack from Ohio]

This year, W-2 forms are required to be submitted by Jan. 31, 2017.  This is true for mailed in as well as electronically filed W-2 forms.

[taxxcpa]

13 hours ago, Jack from Ohio said:

This year, W-2 forms are required to be submitted by Jan. 31, 2017.  This is true for mailed in as well as electronically filed W-2 forms.

That only gives the IRS 15 days to verify e-filed returns,  They should delay those refunds at least a month or maybe until April.

[MDEA]

Never happen there are to many people that rely on those refunds to catch up on bills.IRS can do other things to prevent refund fraud.

[Jack from Ohio]

6 hours ago, MDEA said:

Never happen there are to many people that rely on those refunds to catch up on bills.IRS can do other things to prevent refund fraud.

This is not MY problem, YOUR problem or the IRS's problem.  I did not sign on the line or run up the "bills" that need caught up. Poor money management skills of the American public is what has driven the tax refund process directly into the hands of the scamsters.

Until Americans decide to take up personal responsibility for their lives, their families, their finances and cure themselves of the "Tax Refund As Quick As Possible" addiction, the scamsters will extract billions of the working Americans' money from the Treasure.

Congress, nor the IRS will NEVER make the changes necessary to stop the scamsters.   If they did, they would get voted out of office. (Which might not be such a bad thing if you think about it.

[taxxcpa]

People who rely on EIC to pay bills should not be the tail that wags the dog.  They should just wait until April and after a one time delay they would be OK to wait 12 months for the next EIC.  

[jklcpa]

I think it shouldn't be on the return at all. I'm not the welfare office that should screen people for this benefit. We all know that it will never go away, so I think the IRS should hold the refund until it has verified the W-2s with the SSA and employer filings whenever that happens...sometime in mid-summer. This two week wait is a joke.

[MDEA]

I can tell by your answers that none of you deal with poor clients. In the shopping center I am in the best sales of the year are the two first  weeks of tax refunds. My refunds totaled more than 3.5 million dollars to my clients. They pick up their Xmas presents when they receive their refunds. Waiting two extra weeks will not hurt them but there are rumors that Refund Anticipation Loans may be back next year. Remember in this country every action has a reaction.

[taxxcpa]

The government should stop RALs

[Jack from Ohio]

12 hours ago, MDEA said:

 but there are rumors that Refund Anticipation Loans may be back next year.

Not gonna happen.  The debt indicator is no longer available.  Just an urban myth propagated by those banks that made a ton of money issuing RALs.

[MDEA]

Last year we advanced people $750.00 without debt indicators. Of the 450 I did every one received their refund and paid back the money.They just have to increase that to $1500 and that will make the clients happy. This was not a loan no refund no pay back.