IRS to de­lay tax re­funds for mil­lions of low-in­come fam­i­lies

Hawaii Tribune Herald - - LIFE -

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.

Associated Press file photo

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.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.