The Internal Revenue Service is utilizing the provisions of the Protecting Americans from Tax Hikes Act of 2015, or the PATH Act, as part of its never-ending effort to cut down on incidents of tax fraud. However, one of the consequences of this law designed to protect the American taxpayer is, unfortunately, a brief delay in refunds for the 2016 tax year.
Specifically, anyone who submitted their returns when the tax season officially opened for the year will have to wait until at least Feb. 15 to receive their refunds. The IRS is notifying taxpayers that these refunds may not land in their accounts until Feb. 27.
So why the delay? In a nutshell, the PATH Act resulted in changes to the IRS’ processing of returns from early-bird filers who claim an earned income tax credit or an additional child tax credit. Since refunds for taxpayers claiming these credits tend to be higher, the officials who authored the PATH Act were concerned that these returns are more likely to be fraudulent.
Inconvenient or not, fraudulent returns could cost the government – and the taxpayers – hundreds of millions of dollars in a given year. So, it is not difficult to understand why the IRS would want to take a little extra time to combat this issue.
The first task mandated by the PATH Act requires filers to take extra measures to verify their eligibility for either of these tax credits. In turn, the extra questions used to prove to the IRS that a filer indeed qualifies for the requested credit will take longer for the agency to review once the return is filed. The result is a delayed refund.
Any taxpayer who is due a refund from the IRS wants that check from Uncle Sam as soon as possible. The agency understands that, and knows that is why many choose to file as soon as possible. Still, the IRS hopes the extra vigilance will be worth the wait.
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