written by Jacob Hall
The 2017 tax filing season began on January 23. There are some foreseen speed bumps for taxpayers, especially for taxpayers who are filing early. The IRS expects to receive more than 150 million individual income tax returns and a vast majority of those tax returns will be filed electronically and the IRS has extra safeguards in place to guard taxpayers from cybercrime.
The start of the filing season is busy with the IRS processing returns from taxpayers anticipating refunds. However, a law passed in 2015 that may hold up some refunds. The law, the Protecting Americans from Tax Hikes Act, impacts taxpayers claiming the earned income tax credit (EITC) and the additional child tax credit (ACTC).
The PATH Act generally requires that no refund will be made to a taxpayer before the 15th day of the second month following the close of that tax year, if the taxpayer claimed the EITC or ACTC on his or her return. This is the first filing season impacted by the new rule.
The IRS has reported that it will begin releasing refunds affected by the PATH Act’s new rule on February 15, 2017. However, many early filers likely will not have access to their refunds until at least the week of February 27, per the IRS.
Along with the advising taxpayers about the possibility of delayed refunds, the IRS also has been stepping up its education about tax-related identity theft. Cybercriminals use a variety of tools to scam taxpayers. Identity thieves call taxpayers and claim to be IRS employees and demand payment of nonexistent tax debts or they tell taxpayers that the IRS needs to verify their personal financial information.
The IRS has partnered with tax professionals and the tax preparation industry to protect taxpayers from cybercriminals. Many of these protections are unseen to taxpayers. The IRS has upgraded its return processing filters to discover fraudulent returns. The agency also has safeguards built into electronic filing.
Keep in mind that cybercriminals are most active early in the filing season. Taxpayers first learn they are victims of identity theft when the IRS rejects their return. If you have any concerns that your personal information may have been stolen or compromised, please contact our office. Please contact us if you have any questions 417-881-0145.