Holds on EITC Returns Have Ceased

Last week, reports indicated that the IRS was paying special attention to tax returns that claimed the EITC, thus delaying their refunds. Ironically, taxpayers who claim the EITC are usually the ones that need their refunds the most.  IRS Representative Terry Lemons stated that they are not paying special attention to returns claiming the EITC. He went on to say that if there were delays with refunds, it was because of incomplete Forms 8867 being filed. Another problem was occurring when people filed their own taxes and unnecessarily filled out an 8867. Filing extra forms or missing forms can cause major delays, because the IRS has to contact the person and attempt to acquire the correct forms and information. In handling the incomplete 8867 forms, the IRS has sent out 12 C letters requesting that the missing information be filled out completely. If you received a 12 C letter, you should fill out the appropriate information, which may impact how quickly you receive your refund. If you early filed EITC returns, you will most likely have your refund in the next week or two, according to the IRS.

The IRS has been taking extra precautions against fraudulent claims and identity theft this tax season, many worried that might mean extensive delays in refunds. Lemons made it clear that the IRS had “increased scrutiny on fraud in general, but we’re not giving special scrutiny to returns claiming EITC”. He also stated that the IRS had worked through the earlier EITC returns, and that filers should be receiving their refunds very soon, in addition the  “Where’s My Refund” site is updated every night, so that taxpayers can track how much longer their refund will take.

Many preparers who have had the same clients for years are finding the new precautions that have been taken to help avoid fraudulent claims are causing lots of headaches. Even if a preparer has had the same client for twenty years, they still will need to provide detailed proof of a child’s existence, this may seem unnecessary and time consuming. However,  if client has their identity stolen, the extra step begins to make more sense. Most paid preparers keep documentation as proof no matter what, if for no other reason than to cover their own tracks along with their client’s. Although it is frustrating to have refunds delayed, it is worth waiting an extra week or two for the insurance that someone isn’t stealing your client’s identity.

By Katie Sapp, Industry Writer