Tax Refunds Will Be Delayed for Low-Income Families
As soon as the calendar turns over to a new year, millions of folks are on the lookout for their W-2s and not long after, their tax refunds. However, more than 40 million low-income families will see delays with their refunds this year as the IRS steps up its efforts to combat identity theft and fraud.
Families claiming the earned income tax credit and the additional child tax credit will be affected by the delays. Filing season begins Monday, January 23rd. The families claiming these credits will have their refunds delayed until Wednesday, February 15th; processing will occur at the end of February. The IRS estimates that 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. Over those two years, the IRS says it blocked nearly $47 billion in fraudulent refunds.
This year, the IRS expects to process more than 153 million tax returns. More than 70 percent of taxpayers are expected to get refunds. In most cases, the IRS says it can issue refunds within three weeks of receiving a return. The earned income tax credit is one of the federal government's largest anti-poverty programs. It has also been plagued by billions in improper payments each year, including overpayments, underpayments and fraud.