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Checking Status of Your Federal Tax Refund Is Easy

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• 24/7 access
• How quickly posted
• Direct deposit
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If you filed your federal tax return and are due a refund, you can check the status of your refund online. Where’s My Refund? is an interactive tool on the IRS web site. Whether you split your refund among several accounts, opted for direct deposit into one account, or asked the IRS to mail you a check, Where’s My Refund? will give you online access to Read more

Tax Refunds Delayed By Educational Credit Programming Glitch

The Internal Revenue Service has found that changes in Form 8863, Education Credits, are delaying more than 600,000 tax returns, many of which appear to come from H&R Block. The IRS acknowledged in an email Friday that it revised the form for tax year 2012 “to help taxpayers and tax preparers understand the qualifications for the American Opportunity Tax Credit. Checkboxes for lines 23-26 were added to confirm basic qualifications for taxpayers claiming this credit. If these lines are left blank, there will be a delay in the processing of the taxpayer’s return. To avoid delays, ensure your clients complete Form 8863 correctly.”

The IRS originally warned about the delays last month, telling preparers that they needed to fill out Yes or No in response to certain questions asking whether students had completed four years of post-secondary education before 2012 and whether they had ever been convicted before the end of 2012 of a federal or state felony for possession or distribution of a controlled substance (see IRS Warns of Problems with Education Credit Filings). However, it turns out the IRS had actually made further changes in the programming of the forms so that an N needed to be filled out instead of a No. The form itself, though, has checkboxes next to the words Yes and No. All this confusion has led to many frustrating refund delays for taxpayers, particularly at the nation’s largest tax prep chain, H&R Block. On Sunday, Block posted a message on its Facebook page saying it was working to resolve the issues with the IRS after being inundated with complaints from customers.

“H&R Block has confirmed with the IRS that there was an issue with certain tax returns filed before February 22, 2013 that included certain education tax credits claimed on Form 8863,” the company wrote. “We have worked with the IRS to expedite a solution to this issue for all of our affected clients.  If you received this letter of notice requesting additional information for Form 8863 and already responded to the IRS, or have not received a notification to date, there is no additional action needed at this time. For those clients who have received notification from the IRS and have yet to respond, please call your local H&R Block office or 800-HRBLOCK. The office or customer service agent will be able to better serve you and provide next steps. For those clients who received the IRS notice regarding form 8863 that said it would take 6-8 weeks to receive a refund after this issue was resolved, we are assured it will not take that long. We continue to work with the IRS and as we have more specifics on timing and any other updated information, we will share it with our clients.”

An IRS spokesperson told MarketWatch on Tuesday that the problem was delaying the processing of about 10 percent of the approximately 6.6 million tax returns filed with the Form 8863. Block has apparently been the major recipient of thousands of complaints on Facebook and Twitter about the problem. The IRS is able to process the tax returns now that it knows the source of the errors, but because that means there are extra steps involved, taxpayers will still be subject to delays. One recent comment on Block’s Facebook page from a customer indicated they have been waiting a month and a half for their tax refund.

Block updated the Facebook page Tuesday to say that it was going to reach out individually to the taxpayers who were affected, referring obliquely to articles like the one on MarketWatch as well as other outlets like USA Today and Forbes about the problem. “Sorry for the late update but we’ve always assured you we would share information as soon as it becomes available,” said Block. “There continues to be a lot of information floating around regarding the Form 8863 issue that is impacting a number of our clients. We wanted to give you a place to go to get those facts and the next steps for those in this situation. In addition to this page on our website, we are reaching out to each and every one of you individually to give you direction and give you the facts. Please look for those emails, calls or letters starting tomorrow. Again, we apologize for the inconvenience this has caused and we’re glad to hear some clients are already seeing their refund status change due to the work with the IRS. Please keep checking here and on the website for the latest information.”

On the new page about the situation on its site, Block stated, “The IRS has informed us and other impacted providers that they are currently processing these returns. This review process means the IRS may need 4-6 weeks from this date to issue a refund. H&R Block clients are already reporting a change in their refund status since the IRS began processing these returns.”

Block added that the IRS is reminding taxpayers to check the “Where’s My Refund?” tool on to learn the status of their tax refund, but since the site is updated overnight by the IRS, taxpayers do not need to check it more than once a day. Early in tax season, the IRS asked taxpayers not to check “Where’s My Refund?” too often because it was getting bogged down with requests from anxious taxpayers (see IRS Asks Preparers and Taxpayers to Limit Use of ‘Where’s My Refund’ Tool).

Block said no additional action is needed for H&R Block clients who have already received an IRS letter requesting additional information for Form 8863 and already responded to the IRS; or have not received an IRS letter about Form 8863 to date. For those H&R Block clients who have received a letter from the IRS and have yet to respond, they are asked to call their local H&R Block office or 800-HRBLOCK. “The IRS has stopped sending letters based on this Form 8863 issue to this group of affected H&R Block clients,” Block noted.

The glitch is also causing problems for taxpayers who are applying for financial aid through the Free Application for Federal Student Aid program. Block advised that there are manual steps they can take that will allow their FAFSA application to proceed while their return is still processing. The Department of Education suggests that if the tax return has not yet been processed by the IRS, they can manually enter the tax return data on the application. They can then return to the online FAFSA to update the information when the return has been processed. The information about this is posted on the FAFSA section of the Department of Education’s website.

Block offered a statement of regret to its clients, saying, “H&R Block appreciates that this issue may cause problems for our clients and we are doing everything in our power to address the processing of these returns. We will continue to update clients as more information becomes available. We thank our clients for their patience while we continue to work with the IRS to expedite the filing process on their behalf.”

The delays in tax refunds this year after the last-minute fiscal cliff deal are also starting to have an impact on the economy at large. Walmart CFO Charles Holley told an investor conference Tuesday that the big box retailer has cashed $2.7 billion worth of tax refund checks this year so far in the U.S., compared to approximately $4 billion at this time last year, according to Reuters.

What with all the confusion this tax season, including the late start to the season and delays in forms including the one for education tax credits, the last thing that taxpayers and preparers needed was a major software bug caused by a difference of one letter in the alphabet. To paraphrase an old saying, sometimes…

“No really does mean No!”


 What do you think?  Feel Free To Comment.


By Michael Cohn, Editor-in-Chief, Accounting,  March 13, 2013

Edited and posted by Harold Goedde CPA, CMA, Ph.D. (taxation and accounting)

No More Holds On EITC Returns

The IRS announced that it would no longer hold tax returns that both claimed the Earned Income Tax Credit [EITC] and had incomplete Forms 8867 attached.

Late last week, published reports indicated that the IRS was devoting special scrutiny — and so delaying refunds — to filers who claimed the EITC, typically those taxpayers who needed their refund checks the most. IRS spokesman Terry Lemons, however, said on Monday that the service was paying no special scrutiny to such returns and that any delay in refunds was a “processing” problem caused by incomplete or inappropriate use of Form 8867.

“We were seeing two issues with the 8867 during the early part of filing season,” Lemon said. “In one instance we were seeing the form being filled out incompletely. The other issue was with taxpayers who prepared their own returns and had an 8867 with the return and didn’t need it because the return wasn’t filled out by a preparer. Those two situations created a processing issue for us.”

“We’ve increased scrutiny on fraud in general, but we’re not giving special scrutiny to returns claiming EITC,” he said, adding that the service has “worked through those [early EITC] returns” and that filers in that group should be getting their refunds soon. He also confirmed that fewer than five percent of returns submitted claiming the EITC have had refunds delayed and that refunds should generally take one to two weeks if returns were e-filed and direct deposit was selected as a payment option.

“We’re in good shape on this front,” Lemon added, also stressing that the “Where’s My Refund?” site is updated overnight.  The IRS did acknowledge in a recent question and answer flyer that it was holding returns “submitted with incomplete Forms 8867 and was sending Letter 12C to taxpayers requesting they provide the required missing information. [But] as of February 19, these returns are no longer being held and 12C letters to taxpayers are no longer being issued” and the returns were being processed. Those who have received a Letter 12C should respond to it, the service said, adding that it would contact preparers about any compliance issues after return process is complete. It also noted that those whose returns were held prior to February 19 should expect their refunds in the next one to two weeks.

Finding Out The Hard Way

Some preparers’ experiences are consistent with IRS warnings regarding Child Tax Credit and the EITC before tax season began. “Some of our clients have had their refunds anywhere from two to 14 days. There doesn’t seem to be a consistent method of processing. It seems like the EITC and college credit returns are taking a little longer to process, however,” said Michael Perkins, enrolled agent and president of Larrison’s Tax Service in Terre Haute, Ind.

Preparers on LinkedIn tax prep discussion boards have been reporting a number of delays in refunds for reasons such as failing to indicate that a filer’s family included a disabled child. Some preparers have chosen to refer EITC clients directly to local IRS preparers, and others dislike having to ask clients for such personal information, as well as questioning the appropriateness of the sources the IRS asks for regarding verification.

“Line 26k of the 8867 will accept an ‘Employer Statement’ as proof of residency,” wrote one preparer. “How ridiculous is it to think an employer is better qualified to prove residency than the man who tucks the kids in bed at night?”. “Why would I need to see more than a birth certificate for a client’s own child?” wondered one preparer. “ ‘Oh, I’m sorry, I know you gave birth to him and you’ve been my client for 10 years and he’s been on your return every year, but can you please run down to his school and ask for a statement that he is indeed your kid living in your home going to school from your house?’ That is completely ridiculous.”

“For the past several tax seasons, preparers have expressed concern over the amount of information that they are required to obtain from their clients before EITC eligibility can even be determined,” said EA Cindy Hockenberry, manager of the tax knowledge center for Appleton, Wis.-based National Association of Tax Professionals. “Many preparers are finding out the hard way that merely filling out Form 8867 and answering the questions is not sufficient. They need to dig deeper, ask more questions and request to actually see more documentation to determine eligibility. This takes time and creates delays and increased fees. Taxpayers have a difficult time understanding this, especially if they have been coming to the same preparer for years. The days of merely having a dependent and low income to qualify are gone. In many cases, obtaining the necessary information is a burden on the taxpayer.”

Some preparers’ organizations have also reported hearing from members that EITC due diligence can be a maze with the only clear end a $500-per-return penalty should they get it wrong. One culprit: Section 10.34(d) of Circular 230 that says a preparer may “rely in good faith without verification upon information furnished by the client.”


The least the IRS could do is post the returns on its site as being processed, instead of looking like the return has not been e-filed at all,” said preparer Tony Hernandez of Hernandez Enterprises in Ridgecrest, Calif. “Some of my clients have been checking, see nothing, and of course then call me to find out why their return hasn’t been filed.”

WOW, I never realized just how many paranoid people there were in the world. I have been doing taxes for nearly 20 years and I have never had a single client try to claim “fake” kids or have more than one person get away with claiming the same child. There is no way two people can claim the same child unless they have two social security numbers for that child. I have had clients that play the “I have to file earlier than the other parent so I can get the exemption before they do” game. I hate that some of the “big box tax prep stores” solicit their clients as early as Thanksgiving by offering to secure their refund as a pre-Christmas loan using their pay stubs to estimate the year-end amounts. I believe this is a ridiculous gimmick that ends up costing the client nearly $500 just to prepare their taxes and pay for the loan fees. It also encourages those who are in need to over extend themselves. Any tax/financial adviser should try to teach their clients to save for the holidays by lowering their withholding or taking the advanced EITC. That would increase their income throughout the year and then they might be able to budget a little of the extra to a Christmas club account or savings instead of allowing the government to hold their money interest free.

I don’t think the IRS should require me to ask long time clients for all that documentation when I know the children belong to them. Am I supposed to ask myself for the documentation as well since my family also qualifies for EITC and I prepare our return? Should I trust myself?

I can see asking the clients for a birth certificate as well as social security card since the card just verifies they have a number and not their parentage. But get real, who thinks to bring a letter from the school to a tax prep appointment? And how much burden does that add to the schools if they have to prepare letters of verification for all their students?

Finally to the Notary, I certainly hope you refused to notarize documents that you felt might be falsified. As a notary, as well, I know that would be against the law.

Posted by: Rennaemcintosh,| February 27, 2013

Tax preparers have too much on the line to commit fraud. I say they need to look who prepares the most returns with the EITC credit. Not private preparers. H & R BLOCK,  Liberty Tax Services, Jackson. Hewlett.  These are the firms that most people who have the EITC go to. They advertise to get clients big refunds based on the EITC.

Posted by:  Optimouse , February 26, 2013

This whole thing is going to be a process and it is going to be painful at times to both preparers and to taxpayers. We just got done with 15 years of no enforcement by the IRS. People could do just about anything they wanted without much risk at all of being audited. As usual it’s the extremes that cause major issues and in this case going from near zero enforcement to complete enforcement of the tax code is going to take time. So many Americans no longer see the need to listen to a professional because there neighbor, brother or friend has been doing things one way for 15 years and never had anything happen so in their mind they can do the same and they do not consider any need of professional help. It will take many news stories and horror stories from there friends and family before the majority of the public starts to understand. If the IRS is going to get a handle on this as quick as possible they have to include the preparers to get the message out and to help put the fear in the American Public. Also because of close to no enforcement there are more a large numbers of preparers who have made allot of money taking advantage of the no enforcement and by including the preparer to fix this issue they also get to weed out the offices that have been promoting and taking advantage of EITC fraud and other fraud.

Over all this year I know we are doing all we can to ensure no fraud gets by us by doing things that make sense while not running good clients away. Most all of our good clients understand why we are asking for additional info and understand now that times are changing. I think additional changes are coming for the low income taxpayers in this country and would not be surprised when the IRS implements a system where children are assigned to someone and a system where the IRS will mail out a single form calculating there refund and all the clients need to do is sign and return taking the preparer out of the picture. I still believe the tax business is a gold mine and that additional opportunities because of the future enforcement efforts that are coming down the road and believe these opportunities will provide a great opportunity for additional revenue that will replace and surpass that of the income lost if they change low income tax returns.

Posted by: louisvilleliberty , February 26, 2013

I agree with all comments. I had a previous client to come in my office and request her W-2 from 2011.  She said she needed it to prepare her 2012 return online.  I laughed, but gave her nothing, because I gave her a copy of her 2011 return last year. Also a new client came in, and wanted an estimate, I told her I don’t do estimates – I am a paid tax preparer. She read my sign and agreed to allow me to  prepare her return. She did not want to file it because her refund was $ 4,440. The taxpayer said she wanted to go to Mary T., because Mary T. could get her a $10,000 refund.  I told her Mary T. is not a tax preparer, she is a fraudster, preparing 20 to 40 return on Turbo Tax, H & R e-file and other on-line software programs. The tax payer became very angry. I filed the return and she realized it was the right thing to do.  But for sure she will not return next year.  Every one here in my Texas town loves Mary T. the fraudster tax preparer online.  I have reported her to the IRS, but they have done nothing.  I reported her just this past January 4, 2013. Mary T. has been doing this for over 4 years.

Posted by: hitsero3, February 26, 2013

The tax returns with EITC included should not be held up unless there is something that raises a red flag. I have worked for H & R Block for 14 years before leaving to start my own at-home business. I’ve seen every type of situation when it comes to claiming children as well as adults at tax time. The number of returns I have amended lets me know that these branch offices of the big companies are doing whatever it takes to get the largest refund they can for their customer, no matter what. Circular 230 was created to control some of the fraudulent practices by some of the unscrupulous tax preparers (you know who you are!). The laws and regulations were put in place to help us and protect the consumer. If more of us would obey them, and fill out these forms with the information needed, the tax process would go a lot smoother.

Posted by: Jaybee3,  February 26, 2013

People are hurting for money more than ever and tax cheating seems to be where they have all found where they can get more dollars since they say the IRS only audits millionaires. I tell them about the 80% fraudulent penalty they could get but it only scares a low percent of the tax cheats. IRS needs to review at least 35% of all EITC are cheating and that is a lot of money.

Posted by: Karin K,  February 26, 2013

By Jeff Stimpson“Tax Pro Today”,   February 25, 2013

Edited and posted by Harold Goedde CPA, CMA, Ph.D. (taxation and accounting)

We welcome your comments below.


CIRCULAR 230 DISCLOSURE:  Pursuant to regulations governing practice before the IRS, any tax  advice contained herein is not intended or written to be used and cannot be used by the taxpayer for the purpose of avoiding tax penalties that may be imposed on the taxpayer.

Tax Refund Delays

There’s a massive traffic jam on the IRS website. What’s causing the delay? An overabundance of eager taxpayers asking “Where’s My Refund?” In an unusual posting, the IRS has alerted taxpayers and professional practitioners that the Where’s My Refund? feature and other related applications may not be available due to the  extra‑high volume of inquiries. To avoid disruptions, the IRS is requesting that taxpayers check on their refund status only once a day.

It makes sense because IRS systems are updated on a daily basis, usually overnight, and the same information is available on the Internet, IRS2go smartphone app, or the IRS toll‑free line. So there’s nothing to be gained by trying to contact the IRS several times during the day.

The IRS provides three updates:

1. When the tax return is received

2. When the refund is approved, and

3. When the refund is sent.

It says that the best time to check on refunds is during the evening hours and on weekends. Here are some tips to help clients with their refund questions:

1. Have the right tax information ready before using any of the IRS refund tools. This includes your Social Security number, filing status, and refund amount.

2. There’s no need to check Where’s My Refund? more than once a day.

3. To avoid system delays, the best times to check on refunds are evenings and weekends,

4. Don’t bother to call the IRS about your refund. The telephone service has the same information that’s available on the IRS web site “Where’s My Refund?”

The IRS has touted the Where’s My Refund? feature as a 24/7 service. Taxpayers can check on the status of their federal income tax refunds twenty‑four hours after the return has been e‑filed. If a paper return is filed, they can check four weeks after the mailing.

Despite some complications over forms and schedules that had to be updated after the “fiscal cliff law” was signed in January, the IRS claims the tax filing season is off to a good start. Typically, nine out of ten taxpayers will receive their refund in less than twenty‑one days when the return is filed online and they arrange to have the refund deposited directly into a bank account.

The IRS is already receiving more than one million returns a day, and the volume – as well as the number of inquiries about refunds – is expected to increase during the President’s Day weekend.

Approximately 75 percent of individual filers are in line for refunds. For last year’s filing season, the average refund was $2,803.

By:  Ken Berry

Edited and posted by:  Harold Goedde, CPA, CMA, Ph.D. (Taxation and Accounting)