Today, TaxMama® wants to talk to you about your delayed tax refund.
This has been a remarkably busy year for all tax professionals and the IRS – as we have been learning the IRS’ interpretations of the full-blown Tax Cuts and Jobs Act (and some other provisions). Congress writes a few vague words of law – and the IRS is faced with having to issue hundreds of page of explanations. (For instance, just the real estate considerations of the Section 199A deduction span about 400 pages.)
First some good news.
IRS’ efforts to reduce tax identity theft, and the related theft of millions of dollars of refunds is working. Fewer people are affected by identity theft, and IRS is resolving those cases in about the half the time as before.
The bad news.
The efforts to prevent refund theft is slowing down your refunds.
Who’s affected? Primarily people with refundable credits, especially if they file as head of household – earned income credit, child tax credit, American Opportunity Credit.
For some people, it’s taking MONTHS to get your refunds released.
IMPORTANT! When the IRS sends you a notice about the delay, if they ask you for documents, reply immediately. Grouse and complain later. Get them the copy of the W-2 and a letter from your employer when they ask for it, or whatever else the IRS wants. They are only asking because they are missing key evidence of your income, or they don’t have your employer’s W-2 in the system for some reason. (Maybe s/he didn’t file electronically and it takes longer?)
Not responding – your account gets flagged and turned over for more in-depth investigation. The IRS figures that real taxpayers will respond. But identity criminals used your name, address and Social Security number, but their bank account. So the criminals won’t be getting a copy of the IRS notices.
Now, do you understand why, when you don’t respond to IRS inquiries about the tax return YOU filed, the IRS can’t be sure you were the one who filed that return?
So get back to them right away. However, some people have told me they sent in their responses more than 6 weeks ago and still have not seen their refunds. In that case, it’s time to get the Taxpayer Advocate Service (TAS) involved.
The fastest way to do that is to find your local Taxpayer Advocate’s office. You will get through on their phone lines more quickly than calling the national number. https://taxpayeradvocate.irs.gov/contact-us
And if you’re a tax professional with a power of attorney, the Practitioner Priority Service hotline can help you reach TAS.
And remember, you can find answers to all kinds of questions about taxes and business issues, and EA Education, free. Where? Where else? At http://iTaxMama.com/AskQuestion
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