If you thought that filing early would guarantee a speedy return of your tax refund, think again. The IRS is reporting tax refund delays of up to two weeks beyond their normal 10 day return maximum due to computer troubles with their new anti-fraud detection system. The IRS is working extra hard this year to prevent refunds from going to the wrong people, or preventing people from claiming refunds based on fake income and withholding.
If you’ve seen CBS’ new drama Person of Interest, I’d imagine it’s a little bit like that. The IRS computers troll through the millions of tax returns being filed looking for new employment data, address changes, and other abnormalities and spit out social security numbers of potentially fraudulent returns to be further investigated. Already we have received faxes from the IRS requesting employment verification for employees of some of our clients.
What makes this more difficult for the IRS is that the W-2 copies are not due to the Social Security administration until mid-March, which means the IRS has nothing official to match W-2s with. In the interest of getting refunds out faster, the IRS typically will issue the refund and ask questions later. This has led to a vast increase in fraudulent returns by identity thieves.
If you receive a fax from the IRS to confirm employment for an individual you don’t recognize, please don’t hesitate to contact us. There is a procedure to follow to send your W-2 disc directly to the IRS so that they can verify all of your employees at once and not need to contact you again. In theory, this may also speed up the refunds for your employees, but with IRS computers you never know for sure.