Getting a tax refund? Be patient.
It may sound exciting if your tax preparer says that you’ll be receiving a refund this year, but you’ll have to be patient. The IRS is implementing new processes to prevent identity theft of tax refunds, so there could be a delay in receiving your money.
There has been a combined initiative between the IRS, state governments, and the tax preparation industry to prevent tax refunds from being sent to impostors who file fake tax returns to claim YOUR refunds.
Although the IRS says that most refunds will be issued in less than 21 calendar days, the new security measures may create delays in some cases. The same applies to state tax refunds as state authorities are making extra efforts to verify that the person who filed the tax return is the actual taxpayer, and not an identity thief.
By November of 2015, the IRS had stopped payment on $8 billion of tax refunds from 1.4 million fraudulent filings. And, in 2013, $5.8 billion in refunds were sent to identity thieves.
The new industry-wide protections implemented by the summit initiative include new standards for passwords, account log-in verification, and information sharing. For example, electronic filers in Alabama will be required to provide information from a driver’s license or state I.D. card. Additional states may implement similar security measures.
Requesting refunds by direct deposit to a prepaid debit card is a common tactic by fraudulent filers. So, Utah and Alabama have implemented stricter policies regarding direct deposits, including possibly sending a paper check even if direct deposit has been requested.
In Illinois, tax refunds won’t be sent out until March. This will better help to detect fraudulent filings and deter refunds from being sent to impostors. Illinois has already saved almost $5 million as a result of new security protocols implemented in 2015.
In the past, tax agencies have made an effort to send out refunds quickly. Now, the overall goal is to do it right, not fast. Accuracy is key. The effort is to protect you (the taxpayer) and your tax dollars.
So, although the majority of taxpayers won’t notice any delays in receiving their refunds, potentially one out of 10 refunds may take longer than expected. If you want to check the status of your Federal refund you can do so here: www.irs.gov/refunds. Many states also have this feature so check your state tax website.
Better late than never, right?