The IRS is reminding taxpayers who are used to getting their refunds in January that refunds may be delayed for some until mid-February in 2017.
The delay applies to taxpayers who claim the Earned Income Tax Credit or the Additional Child Tax Credit, the IRS wrote in a news release. A new law says those refunds must be held until mid-February so that returns can go through an additional review process meant to prevent identity theft.
The IRS said it didn’t want taxpayers who might be counting on their refunds to pay for holiday purchases in January to be caught off guard by the change.
“While the IRS is working diligently to stop the issuance of fraudulent refunds, it also remains focused on releasing legitimate refunds as quickly as possible,” the press release read.
After about half a million taxpayers reported stolen identities on federal tax returns in 2015, that number fell by 275,000 in 2016, the IRS reported. “Additional safeguards will be set in place for the upcoming 2017 filing season,” the press release assured.
The Earned Income Tax Credit allows lower income households to get a refund even if they don’t pay any taxes in some cases. More than 26 million tax filers receive the EITC, according to USA Today, while about 20 million get the Additional Child Tax Credit for dependents under the age of 17.
The IRS reported approximately 24 percent of all EITC payments in 2013, about $14.5 billion, were paid improperly, some due to error and others because of fraud. The estimated rate of mistaken payment for the Additional Child Tax Credit was up to 30.5 percent, or $7.1 billion, an audit by the IRS Inspector General showed.
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