So you get all your tax information together early and go to your preparer so you can file your tax return early and get the refund quickly. Not so fast. Certain refunds will be delayed and will not be released by the IRS until February 15. This is due to a provision in the PATH Act, enacted by Congress in 2015, prohibiting the IRS from releasing certain refunds prior to February 15. This provision takes effect this year. Note that the 15th is the release date, so it will take a few more days for you to receive the refund.
The purpose of this delay is to deter tax-related identity theft. Many individuals engaged in this practice file false returns early in the filing season, before the IRS even has copies of legitimate W-2 forms. With the new early deadline for filing W-2’s with the government, plus the delay in processing refunds, it is anticipated that tax-related identity theft well be deterred. The IRS will have the opportunity to document match W-2s and other forms and do other unspecified security checks to help assure the filed return is genuine.
The law specifies that any return claiming the Earned Income Credit or the Additional Child Tax Credit will be subject to the delay. Partial refunds cannot be issued.
It is still a good idea to file early, as it gets you in the queue for earlier processing by the IRS and may beat fraudsters to the punch by filing before they have a chance to steal your identity.
While waiting for your refund, don’t blame or call your preparer. He’s filed the return, your refund is out of his hands. Don’t blame or call the IRS. They are merely following the law. The responsible party for the delay is Congress and the President. Congress passed the law, President Obama signed it. However, this legislative-mandated delay is probably a good thing. It will likely reduce the incidence of fraud. Putting things in perspective, it’s better to wait a few days or weeks for your refund than go through the hassle of tax-related identity theft and waiting months for the refund to arrive.
Dr. John Stancil (My Bald CPA) is Professor Emeritus of Accounting and Tax at Florida Southern College in Lakeland, FL. He is a CPA, CMA, and CFM and passed all exams on the first attempt. He holds a DBA from the University of Memphis and the MBA from the University of Georgia. He has maintained a CPA practice since 1979 with an emphasis in taxation. His areas of expertise include church and clergy tax issues and the foreign earned income credit. He prepares all types of returns, individual and business.
Dr. Stancil has written for the Polk County Business Journal and has presented a number of papers at academic conferences. He wrote the Instructor’s Manual for the 13th edition of Horngren’s Cost Accounting. He is published in the Global Sustainability as a Business Imperative, Green Issues and Debates, The Encyclopedia of Business in Today’s World, The Palmetto Business Review, The CPA Journal, and in the NATP TaxPro Journal. His paper, “Building Sustainability into the Tax Code” was recognized as the outstanding accounting paper at the annual meeting of the South East InfORMS. He wrote a book entitled “Tax Issues Faced by U. S. Missionary Personnel Abroad ” that will soon be published.
He has recently launched a new endeavor, Church Tax Solutions, which presents online, on demand seminars on various church and clergy tax issues.
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