It is not very often that taxpayers get a measure of warning about the upcoming tax season, but a recent announcement by the Internal Revenue Service could be an encouraging sign. According to an accountingtoday.com report, the IRS is encouraging taxpayers to consider a mid-year withholding checkup to ensure that they are properly preparing themselves for next year’s tax season.
Simply put, tax returns will be subject to additional scrutiny next year, thanks to a new law that allows the IRS to hold the returns of early filers who claim certain tax credits. Specifically, those who claim the earned income tax credit (EITC) or the additional child tax credit may not immediately receive their income tax refunds.
In conjunction with state tax officials, the IRS will conduct additional reviews of tax returns to ensure that the credits are taken properly, and that identity theft and fraud protections are enforced. This may delay the receipt of refunds by a few weeks. In some cases, returns will be corrected. This may also lead to some refunds being substantially reduced.
In the meantime, taxpayers can take solace in knowing that of nearly 140 million tax returns being filed in 2016, nearly 102 million resulted in a refund being issued. Indeed, many people may not be concerned about their tax returns in September, but for those who want to maximize their returns, a measure of planning is helpful. With that, a conversation with an experienced tax attorney would be beneficial.
The preceding is not legal advice.