Few folks are as eager as those awaiting a tax refund.
Well, there's bad news for some of you early filers.
New anti-fraud measures implemented this tax filing season have caused the Internal Revenue Service to be a bit slow in sending out refunds.
After getting calls from taxpayers and tax professionals wanting to know why folks were still waiting for refunds -- e-filers generally can expect their directly deposited refunds in about 10 days -- the IRS announced that the tax cash could be delayed a week because of a new anti-fraud safeguards.
Here's the official email word from the IRS via its QuickAlert notification system:
"As with the start of any tax season, there are system validations that occur requiring some fine-tuning of our systems. As part of this, some taxpayers will receive refunds approximately one week later than initial projections they may have received, but these are still in line with historical refund delivery times.
The one-week delay for some refunds relates to fine-tuning IRS systems to adjust for new safeguards put in place this tax season to provide stronger protection against refund fraud. The IRS is providing additional screening for fraud this year before issuing refunds, but the vast majority of taxpayers can still continue to expect to receive their refunds in a timely fashion."
ID theft issues: While the delay is understandably irritating, the reason is legitimate.
Tax refunds lost to identity thieves is a growing problem. In 2010 alone, reported the Government Accountability Office (GAO) last year, the IRS identified more than 245,000 incidents of identity theft.
While that amount is tiny when you consider that around 140 million of us file tax returns, it represents a nearly five-fold increase in taxpayer identity theft between 2008 and 2010.
It's just too bad the IRS couldn't test its fraud detection system before filing season began.
Not so fast: There are reports, however, that the "vast majority" of taxpayers the IRS says are getting their refunds quickly might be overstated.
Beverly Russell, a financial planner for Jackson Hewitt in Spartanburg, S.C., told CBS affiliate WSPA-7 that his office received a memo from the IRS saying they were "researching an issue with their fraud screening and detection process, which could impact between 60 to 70 percent of refunds for this funding cycle. This would include returns accepted by the IRS before 11 a.m. on January 18th."
"They're using the term 60 to 70 percent will get delayed," Russell told the TV station. "So that means 30 to 40 percent will get through, so I don't know which 30 or 40 percent is going to be happy or not."
Refund timing: As I noted in my earlier post about when to expect your tax refund, those delivery dates are estimates.
The IRS reiterated that in its notification about this delay:
"The IRS reminds taxpayers that refund time frames provided by "Where's My Refund" and tax providers are projected time frames and are subject to revision. Many different factors can affect the timing of the refund after the IRS receives the return for processing. The IRS apologizes for any inconvenience caused by the revised refund dates."
So if you filed early and are getting a bit anxious about your refund, this probably is the reason you haven't received it yet.
You can find out its exact status by using the agency's Where's My Refund tracking tool.
And not to be too much of a tax nag, but it's also another reason why you should adjust your withholding.
A tweak of your W-4 will mean you won't have to depend on the IRS to send you back your cash that you could have had control of all year.
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