If you’re thinking of claiming— or have already claimed— the Earned Income Tax Credit or the Additional Child Credit, the IRS wants to make sure you know your tax refund will be delayed.
This year, the IRS has released several notices reminding taxpayers that their refunds will be delayed if they claim these credits. The IRS has stated that the delay for those claiming the EITC or ACC is because of a new tax law that took effect for the 2017 tax year. This law requires that the IRS hold refunds longer for early filers claiming the EITC and ACC. The reasoning behind the new law? To help the IRS spot tax fraud.
This new law is designed to give the IRS more time to get documents from employers and citizens so they can more accurately confirm that EITC and ACC credits are not being filed fraudulently. The new law also comes with some strict punishments for anyone claiming the EITC falsely. Those who falsely claim may be banned from claiming the credit for either the next two years or the next ten years, depending on whether the claim was due to recklessness or fraud, respectively.
The IRS has stated that those who claim the EITC and ACC this year can expect to wait until February 27th or later. The exact date when taxpayers can expect a return will depend on when they filed, whether they are receiving their refund by direct deposit, and whether or not their return could be delayed for another reason.
The IRS has also recently warned taxpayers about a new refund scam. Unfortunately, scammers tend to surface during tax season, trying to tax advantage of taxpayers. This year, the IRS has reported a new scam that citizens should be aware of. The scam involves a criminal posing as a debt collector and contacting taxpayers who have already received their refunds. The criminal tells each taxpayer that their refund was sent by mistake and that they must send it “back” to the criminal.
Another tax scam that the IRS has stated is prevalent in 2018 is tax identify theft, wherein criminals pose as taxpayers. The IRS has reported that these scammers are using real names, addresses, and Social Security numbers to file as other citizens and receive their tax returns.
It’s important to stay vigilant and aware of the tax scams being committed each year. And it’s also important to understand that one of the best defenses against tax fraud is filing as soon as possible. Tax identity theft is a common tax scam, but filing before an imposter can file under your identity is a strong defense.
Filing early is also the best way to make sure your refund is delayed as little as possible if you’re claiming either the EITC or the ACC. If you want to make sure your taxes are filed as quickly and expertly as possible, contact Vanguard Tax Relief. Our tax experts can easily get your returns immaculately prepared and swiftly sent to the IRS, so you can get your best possible tax return— and refund— quickly and painlessly.