Will My Refund Be Delayed This Year?

If your rely on your refund, plan for delays
If your rely on your refund, plan for delays

“Will my refund be delayed this year” is becoming an all too common refrain these days. Delayed e-filing dates, IRS not accepting tax forms & documents not being mailed out on time have all occurred over the last few years and have caused refund delays. However for the 2017 tax filing season (2016 tax year), it looks like we will get hit with all three of these scenarios at once:

Electronic Filing Start Date

Electronic filing has historically began around January 15th.  However, over the past few years, these dates have been pushed back from a couple of days to a couple of weeks.  This year is notable because as of time of this writing, the IRS has not even formally announced a beginning date to electronic filing!  A commencement date is usually announced weeks if not months earlier.  Therefore, it is a good bet to expect electronic filing to begin after 1/15 this year.  We will post the official start date once the IRS releases it.

IRS Delaying Processing of Popular Tax Credits

The IRS has announced that the following tax credit forms will not be accepted for processing until February 15th, 2017:

  • Earned Income Tax Credit (EITC)
  • Child Tax Credit (CTC)
  • Additional Child Tax Credit (ACTC)
  • The American Opportunity Credit (AOTC).

This is a nationwide law change required by Congress in the Protecting Americans from Tax Hikes (PATH) Act; this is not a company or state change. If you normally file your taxes around this time (2/15/17), this delay should have a minimal impact on you.  However, if you tend to file early and/or have plans for your tax refund in advance, R&G Brenner suggests that you prepare yourself accordingly. For example: if you rely on your refund for critical services (rent, utilities, etc), we suggest that you save some funds to carry you through any potential delays.

IRS Delays Form 1095 Distribution Deadline

The original deadline for distributing Form 1095-B and Form 1095-C to individuals was January 31, 2017. The new deadline is March 2, 2017. The extension provides Applicable Large Employers (ALEs), self-insured group health plans, and health insurance carriers more time to populate and distribute the forms.  Since a final tax return cannot be filed without these health care related reporting, this too may delay the filing of your return and receipt of your refund.

These delays will affect taxpayers who claim popular credits & professional tax preparers the most as it may create a backlog and crush of appointments later on in the year.  R&G Brenner suggests that you bring with you all supporting documentation for the above tax credits which will allow for the accurate preparation of your return and help minimize any potential delays.

If you have any additional questions about this or anything else, please feel free to contact an R&G Brenner professional via the web, or by calling us toll free: (888) APRIL-15.

IRS Computer Problems Shut Down Electronic Filing Of Tax Returns

Computer problems have caused the IRS to cease accepting electronically filed tax returns until further notice:

The outage could affect refunds, but the agency said it doesn’t anticipate “major disruptions.”…”The IRS is still assessing the scope of the outage,” the agency said. “At this time, the IRS does not anticipate major refund disruptions; we continue to expect that nine out of 10 taxpayers will receive their refunds within 21 days.”

Source: USA Today

TurboTax Stops E-Filing Tax Returns Due To Fraud Concerns

Are You Sure...You Wan't To Use TurboTax?
Are You Sure…You Wan’t To Use TurboTax?

Intuit’s TurboTax–the leading do-it-yourself tax preparation software used by million of taxpayers–abruptly turned off the ability to file 2014 state tax returns citing “an increase in suspicious activity”.  This comes on heals of claims of “price gouging” by its customers which caused a major public relations uproar forcing the CEO of TurboTax to pen an apology.

[Intuit] has found an increase in criminal activity where stolen personal data is used to file fake state returns with state authorities. This illegal act allows fraudsters to claim tax refunds from state governments.

An internal TurboTax investigation has found the breaches are not due to a problem with its own systems, but criminals digging up the personal information elsewhere. The company said the investigation is ongoing. Intuit says it’s working with state tax officials to get the e-filing security back to where it needs to be to turn it back on…

TurboTax stopped allowing state tax returns to be filed when the state of Minnesota alerted them that they would no longer accept returns filed thought their product.  This was discovered when two Minnesota taxpayers logged onto TurboTax to file their returns and were surprised to find out that their returns where already filed.  The state is now reviewing thousands of returns as part of its investigation which at best is sure to delay refunds.  No word yet on when TurboTax or affected states will resume e-filling tax returns.

Source: USA Today

UPDATE

The issues with fraud surounding TurboTax may not be limited to State tax returns.  The FBI is now investigating claims that the fraud has extended to returns filed with the IRS, putting federal tax returns in jeopardy.

Imagine getting a congratulatory email from TurboTax that your federal return is on file when you haven’t yet filed! Given that virtually everything is electronic these days, that has become a massive issue…

But is anyone completely safe? The IRS estimates that it paid out $5.2 billion in fraudulent tax refunds related to identify theft just in the tax return filing seas (sic) last year. That seems like a bad number until you add the amount of bogus refunds last year the IRS says it was able to stop: $24.2 billion. Still, straightening it out if you are the one hit can be challenging…

If you have been affected by tax return fraud–either using TurboTax or by other means–please tell us about in the comments section.

Source: Forbes

What Do I Do If I Haven’t Received My Tax Refund?

Follow These Steps To Track Your Refund
Follow These Steps To Track Your Refund

Filing your tax return was stressful, but now that it’s done you know the amount you’ve got coming and you can’t wait to get your hands on it. This is understandable; we all usually have that refund earmarked for something. That’s why it can be so frustrating when your tax refund doesn’t arrive on time. Read on to learn what to do if you’ve been waiting an exceptionally long time for your tax refund.

Gather Some Information

The first thing you should do when you have yet to receive your federal tax refund is to gather your social security number, filing status and the exact amount that you expect to get so you can check your return status online or over the phone. Having this information close at hand is necessary to start the process.

Check the Status of Your Return

It’s important to first check your return status before you check your refund status. You can do so over the phone or by logging in securely to your account on the IRS website. If you used an e-filing service to process your return, inquire about your status with that company. Many such services offer online log-ins where you can easily check your account. If you didn’t use an e-file service, you can call the IRS toll-free at 1-800-829-1040. If you are lucky to speak to an agent during your first call, hopefully they will be able to tell you if there was a delay, and what the cause was. Often, the return simply hasn’t been processed yet.

Once you’ve confirmed that your tax return has been processed, you can check your federal tax refund status. If you opted for a direct deposit into your bank account, call the bank and see if the check has been deposited. If it hasn’t, a quick way to check on your status is to use the Where’s My Refund? tool provided by the IRS and you can track where your refund is at any time. The site is updated every 24 hours in the evening, so you can start checking it the day after you e-file your return (or a month after you’ve mailed it in).  You can also call the IRS at 1-800-829-1954 to determine where your check is and why it’s taking so long.

Reasons for Delay

Tax season is a notoriously busy time for the IRS: people are filing taxes, refunds are being processed and issues are being sorted. If you wait to file close to the deadline of April 15th, you could wait longer than if you filed a month or two earlier. In some cases, refunds and identities can be stolen. If you suspect suspicious activity as the reason for your refund delay, contact the IRS immediately at 1-800-829-1040.

Often times, there are good reasons why your refund has been delayed. If you opted for a paper check from the IRS, expect to wait at least twice as long as if you did direct deposit. In order to minimize wait time in the future, plan on e-filing with a direct deposit option next year.