Bad news is hitting consumers who filed 1040 federal income tax returns early. They're going to wait possibly a week or so longer than expected to get their refunds.
John Hewitt, CEO and founder of Liberty Tax Service, based in Virginia Beach, Va., said taxpayers who filed returns any time from the first day of the tax season Jan. 17 through Jan. 24 are facing more hassles.
And yes, tax preparers are hearing plenty of complaints about delays in getting refunds.
The IRS told tax professionals in an IRS alert Thursday afternoon that the one-week delay for some refunds relates to fine-tuning IRS systems to adjust for new safeguards put in place this tax season to provide stronger protection against refund fraud.
"As part of this, some taxpayers will receive refunds approximately one week later than initial projections they may have received, but these are still in line with historical refund delivery times," the IRS said.
The safeguards relate to growing concerns about cyberfraud and crooks who are obtaining refunds by stealing Social Security numbers, creating fake returns, filing 1040s electronically early in the season and obtaining tax refunds.
"The IRS is providing additional screening for fraud this year before issuing refunds, but the vast majority of taxpayers can still continue to expect to receive their refunds in a timely fashion," the IRS said.
But taxpayers didn't expect these delays and are upset.
Many who file early in the season do so because they need that tax refund to pay bills -- so some families could experience more hardship than others even with an extra few days of delay.
"Usually, the refunds take a week to 10 days," Hewitt said. But Hewitt said refunds are likely to take up to 14 days -- if the return was filed between Jan. 17 and Jan. 24.
H&R Block has told its clients that the Internal Revenue Service is using a new technology this year that has caused the IRS to take more time to validate returns at the beginning of the season.
If you're looking at a delay, tax preparers want you to know that it's not them -- it's the IRS.
Hewitt said he understands that the refunds are expected to be back to a more normal pattern for taxpayers who file returns now or later.
At the opening of the 2012 filing season, the IRS advised taxpayers who electronically file and select direct deposit that they could see their refunds in as few as 10 days and 90% of refunds are provided within 21 days.
Some taxpayers are getting refunds much faster, the IRS said, but at this time taxpayers should expect refunds to be issued as indicated in the original IRS guidelines.
By SUSAN TOMPOR
Detroit Free Press