IRS WARNING: MILLIONS OF REFUNDS FOR LOW-INCOME FAMILIES WILL BE DELAYED by Lily Dane
The Immoral Robbery Swindlers, er, the Internal Revenue Service, has made an announcement that is sure to disappoint those who are expecting two very common types of tax refunds this year.
More than 40 million low-income families who claim the earned income tax credit (EITC) and the additional child tax credit (ACTC) will get those refunds later than expected.
IRS Commissioner John Koskinen wrote on the agency’s website:
In an effort to make it easier for the IRS to detect and prevent refund fraud, Congress passed a new law that requires the IRS to hold refunds claiming those credits until February 15th. But this doesn’t mean you should wait to file until then. Taxpayers claiming the EITC or ACTC should file as soon as they have all of the necessary documentation together to prepare an accurate return. In other words, file as you normally do.
The IRS will begin releasing refunds claiming these credits the week of February 15th, but it takes time for these to work through the financial system. With weekends and Presidents’ Day, EITC and ACTC filers should not expect to have access to their refunds via their bank or financial institution before the week of February 27th.
The IRS claims that the EITC and ACTC processing delays are required per section 201 of the Protecting Americans from Tax Hikes Act of 2015 (PATH Act), which “made several changes to the tax law to benefit taxpayers and their families.”
Section 201 of the PATH Act provides “additional time for the IRS to review refund claims based on the earned income tax credit and the refundable portion of the child tax credit in order to reduce fraud and improper payments.”
One of the largest anti-poverty programs, the earned income tax credit paid out $72 million to 29 million families in 2014. In that same year, the additional child tax credit provided an additional $27 billion to 20 million families, reports RT.
Those programs have been plagued by fraud: The EITC alone has paid out billions in improper payments, including over-payments and fraud.
The IRS estimates that it issued $3.1 billion in fraudulent tax refunds to identity thieves in 2014. The year before, the agency says, it paid out $5.8 billion in fraudulent refunds. Over those two years, the IRS says it blocked nearly $47 billion in fraudulent refunds, reports the Associated Press.
However, a new report by an agency watchdog says stepped up screening by the IRS is also delaying legitimate refunds, forcing taxpayers to spend weeks or months proving their identity to the tax agency.
Nina E. Olson, the National Taxpayer Advocate, wrote in her report that last year, about 1.2 million legitimate refunds – worth $9 billion – were delayed an average of more than 30 days:
The report credits the IRS with improving its detection of refund fraud and identity theft on submitted tax returns but expresses concern that the agency’s fraud detection filters have a high degree of inaccuracy and thereby cause significant headaches and refund delays for hundreds of thousands of taxpayers who file accurate returns. During 2016, many of the filters and business rules the IRS used to detect bogus claims had false positive rates in excess of 50 percent, meaning that more than half the returns flagged were legitimate. One process had a false positive rate of about 91 percent.
Olson also reports that for decades, the IRS has viewed itself “first and foremost” as an enforcement agency rather than one that is service-oriented.
How anyone could view an agency that steals money from people under threat of imprisonment is beyond me, but I digress.
Annually, the IRS receives over 100 million telephone calls. Yet, the agency was only able to answer 38% of those calls in 2015 and 53% in 2016. People who were able to get through were kept on hold for an average of 30 minutes and 18 minutes, respectively, in those years.
From the report (emphasis mine):
Of the IRS’s current appropriated budget of $11.2 billion, 43 percent is allocated to enforcement, while less than six percent is allocated to taxpayer outreach and education activities. Despite this imbalance, the IRS budget request for FY 2017 sought an increase in enforcement funding of 7.2 percent, as compared with just 3.1 percent for taxpayer services.
For more than a decade, the IRS has published annual “Enforcement and Service Results” on its website:
These consist of five pages of enforcement data (including audit rates for individuals and business entities, enforcement dollars assessed, enforcement dollars collected, liens filed, levies issued, and criminal indictments and convictions), as compared with one page of taxpayer service data at the end. The report points out that in a large organization, “you get what you measure.”
The IRS has been working on what they call a Future State initiative in recent years, the purpose of which the agency claims is to “move the taxpayer experience to a new level” while “respecting taxpayer rights”.
This, however, appears to be Orwellian-speak for “brainwash taxpayers into complying without question” (again, emphasis mine):
Each of the IRS’s four business operating divisions began by developing its own Future State plan and an accompanying “taxpayer vignette” that the IRS has posted on its website to illustrate how its vision of the future state will work. Each vignette shows the IRS contacting a taxpayer to conduct an audit or otherwise challenge a taxpayer’s return, and in every case, the vignette shows the taxpayer ultimately conceding the IRS is correct and consenting to the IRS’s proposed adjustment – all in a digital environment. That all four operating divisions chose to illustrate their Future State by showing that they were right and the taxpayer was wrong is concerning, the report says.“Nowhere did [any] vignette demonstrate how the taxpayer could prevail in the system of the future,” it adds.
Prior to 2009, the IRS mission statement read:
Provide America’s taxpayers top quality service by helping them understand and meet their tax responsibilities and apply the tax law with integrity and fairness to all.
With no public discussion, in 2009, the IRS quietly changed one word…but that change indicates a dramatic shift in tone and emphasis, with significant implications for taxpayers…
Provide America’s taxpayers top quality service by helping them understand and meet their tax responsibilities and enforce the tax law with integrity and fairness to all.
Koskinen defended the IRS, of course. He claimed the agency has had to get more aggressive in screening tax returns because crooks have become increasingly sophisticated, reports the AP.
“We’re talking about international organized crime syndicates,” Koskinen said.
“Hello, Pot? This is Kettle. You’re black!”
As Ron Paul wrote in The IRS’s Job Is To Violate Our Liberties:
The bipartisan tradition of using the IRS as a tool to harass political opponents suggests that the problem is deeper than just a few “rogue” IRS agents—or even corruption within one, two, three or many administrations. Instead, the problem lays in the extraordinary power the tax system grants the IRS.
The IRS routinely obtains information about how we earn a living, what investments we make, what we spend on ourselves and our families, and even what charitable and religious organizations we support.
The US flourished for over 120 years without an income tax, and our liberty and prosperity will only benefit from getting rid of the current tax system. The federal government will get along just fine without its immoral claim on the fruits of our labor, particularly if the elimination of federal income taxes are accompanied by serious reduction in all areas of spending, starting with the military spending beloved by so many who claim to be opponents of high taxes and big government.
The very purpose of the IRS is to transfer wealth from one group to another while violating our liberties in the process, thus the only way Congress can protect our freedoms is to repeal the income tax and shutter the doors of the IRS once and for all.
To view the full Taxpayer Advocate report, please see Annual Report to Congress.