IRS to delay tax refunds for millions of low-income families
WASHINGTON (AP) — The IRS is delaying tax refunds for more than 40 million low-income families this year as the agency steps up efforts to fight identity theft and fraud.
The delays will affect families claiming the earned income tax credit and the additional child tax credit. These tax breaks are geared to benefit the working poor, and many families claim both.
“For most of these people it’s the biggest check they are going to get all year,” IRS Commissioner John Koskinen said. “We are sensitive to that.”
A new law requires the IRS to delay tax refunds for people claiming these credits until Feb. 15. Processing times will delay most of the refunds until the end of February, Koskinen said.
The delay is designed to give the agency more time to screen the returns for fraud.
The IRS estimates it issued $3.1 billion in fraudulent tax refunds to identity thieves in 2014. The year before, the agency says, it paid out $5.8 billion in fraudulent refunds. During those two years, the IRS says it blocked nearly $47 billion in fraudulent refunds.
In 2014, about 29 million families received more than $72 billion in earned income credits.
The delayed refunds are part of a broader effort by the IRS to fight identity theft and fraud on refunds, which has mushroomed into a multibillion industry.
A blank check sits on an idle press May 8, 2008, at the Philadelphia Regional Financial Center, which disburses payments on behalf of federal agencies.