Tags: irs | delays | working poor | tax | refunds | fraud | id theft

IRS Delays 'Working Poor' Tax Refunds to Catch Fraud, ID Theft

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By    |   Thursday, 12 Jan 2017 11:50 AM

The IRS will delay tax refunds to 40 million "working poor" families this year as the agency tries to get a handle on identity theft and fraud.

People claiming earned income tax credit and the additional child tax credit will be affected the most by the delays, the Internal Revenue Service told The Associated Press. A new law orders the IRS to delay tax refunds for those receiving the credits until Feb. 15 for extra scrutiny.

"There are a number of important changes this year involving refunds and tax law changes that we encourage people to keep in mind," said IRS Commissioner John Koskinen. "We encourage taxpayers to plan ahead and take a few minutes to review these changes."

The IRS said that it is working with state tax authorities in an effort to be more effective in weeding out tax-related identity theft and refund fraud this year.

"… The IRS made significant inroads against fraudulent returns in 2016," said the agency. "While working to stop the issuance of fraudulent refunds, the IRS remains focused on releasing legitimate refunds as quickly as possible in 2017."

The IRS said that because of collaborative efforts there has been a 50 percent decline in the number of new reports of stolen identities on federal tax returns.

H&R Block told Forbes magazine it estimates that the mandatory delay will affect approximately 10 percent of taxpayers. The tax preparer said there could be additional delays past Feb. 15, taking into account weekends and the President's Day holiday.

The IRS cautioned that the refunds with earned income credit and additional child tax credit could be delayed as late as Feb. 27, said Forbes.

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The IRS will delay tax refunds to 40 million "working poor" families this year as the agency tries to get a handle on identity theft and fraud.
irs, delays, working poor, tax, refunds, fraud, id theft
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2017-50-12
Thursday, 12 Jan 2017 11:50 AM
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