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IRS Confirms Delay To Tax Refunds In 2017

by Scott Hamilton,, Washington

31 October 2016

The US Internal Revenue Service (IRS) has confirmed that, to comply with new legislation, it will delay until February 15 the payment of refunds in the next tax filing season on individual income tax returns involving the earned income tax credit (EITC) and additional child tax credit (ACTC).

Its action is driven by the provisions of the Protecting Americans from Tax Hikes Act of 2015 (PATH Act), which was enacted on December 18 last year, and made several changes to the tax law to reduce fraud and improper payments.

To that end, the PATH ACT brought forward the deadline for employers to report wage information on forms W-2, W-3, and form 1099-MISC to January 31 each year (rather than, in the past, the end of February, if filing on paper, or the end of March, if filing electronically).

To comply with the law, the IRS will therefore hold refunds on EITC and ACTC-related returns to allow additional time to help prevent revenue lost due to identity theft and refund fraud related to fabricated wages and withholdings. The agency will hold the entire refund, as it cannot release the part of the refund that is not associated with the EITC and ACTC.

Even with this change, however, the IRS confirmed that taxpayers should file their returns as they normally do. Whether or not claiming the EITC or ACTC, the IRS has cautioned taxpayers not to count on getting a refund by a certain date. Though the IRS issues more than nine out 10 refunds in fewer than 21 days, some returns are held for further review.

"As tax season approaches, the IRS wants to be sure employers, especially smaller businesses, are aware of these new deadlines," said IRS Commissioner John Koskinen. "We are working with the payroll community and other partners to share this information widely."

TAGS: tax | business | law | employees | payroll | tax credits | Internal Revenue Service (IRS) | tax authority | legislation | United States | tax breaks | individual income tax | Tax

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