New year, new money
Like most taxpayers I know the new year brings the tedious process of collecting our W-2’s, expenses, receipts, etc. to take to our favorite tax preparer before tax season opens. After all, the faster we get them prepared the faster we get our refund, right?
It’s no coincidence
Well, usually, except this year the IRS is slowing down some people’s return in an effort to deter and stop the influx of tax fraud from previous years. This delay comes by way of the Protecting Americans from Tax Hikes (PATH) tax law that requires the IRS to hold tax returns claiming the Earned Income Tax Credit (EITC), or Additional Child Tax Credit (ACTF) until February 15.
In a press release the IRS warns against further delays that may push refunds back even further than that:
“The IRS reminds taxpayers that a new law requires the IRS to hold refunds claiming the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC) until Feb. 15. In addition, the IRS wants taxpayers to be aware it will take several days for these refunds to be released and processed through financial institutions. Factoring in weekends and the President’s Day holiday, the IRS cautions that many affected taxpayers may not have actual access to their refunds until the week of Feb. 27.”
Tax fraud – say what?
Now the IRS may not be the most pleasant institution to deal with, but this law wasn’t passed for no reason. It helps detect and prevent tax fraud from those falsely claiming the credits to increase their refund. It is estimated by the Treasury Inspector General for Tax Administration that from 2003 to 2013, between $124.1 and $148.2 billion dollars in EITC were improperly distributed to those who claimed it but did not qualify for it.
Aside from preventing tax fraud the delays as a result of PATH allows the IRS more time to ensure those that actually do qualify to receive the credits, get the right amount.
Time is still of the essence
Despite the IRS threats for delayed returns, I professionally suggest (and yes, I’m a certified and practicing tax preparer) you get your tax information to your tax preparer as soon as possible, even if you do claim either of the refundable credits.
I’ve known the IRS to delay returns for many of reasons, but also no reason at all, so avoid even longer wait times than the February 15th warning.
If you are not claiming the tax credits, no delays for you, or at least not from PATH. Tax season opens January 23rd, 2017.
#TaxSeason
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