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Entries in Tax Refunds (14)

Friday
Feb152013

IRS Urges Tax Filers to Stop Constantly Checking Status of Refunds

iStockphoto/Thinkstock(WASHINGTON) -- As soon as they file their taxes, the first question on most taxpayers' minds is: When will I get my refund?

To better answer this question, the Internal Revenue Service has a “Where's My Refund?” website.  Taxpayers can also check the status of their refund on the agency's smartphone app, IRS2go.

But the IRS says both platforms are getting bombarded with refund inquiries.

"The IRS alerted taxpayers and the tax community it is experiencing high traffic on 'Where's My Refund?' as more tax returns come in.  The heavy volume of refund inquiries means that the IRS anticipates both 'Where's My Refund?' on IRS.gov and the refund feature on the IRS2go phone app will have limited availability during busier periods," the agency said in a statement Thursday.

The IRS is urging taxpayers to check the status of their refunds only once per day, being that its systems are updated every 24 hours, usually overnight.

"To avoid system delays, the best time to check on refunds is evening and weekends," the agency recommends.

And there's no need to call the IRS if you have any concerns.

"The same information is available whether on the Internet, IRS2go smartphone app or on IRS toll-free lines," the IRS says.

Copyright 2013 ABC News Radio

Thursday
Jan242013

IRS Pushes Back Tax Filing Season Eight Days

iStockphoto/Thinkstock(NEW YORK) -- The IRS has delayed the start of this year's tax filing season by eight days.

The window for accepting 2012 tax returns will now open on Wednesday, meaning many early filers will get their refunds late.

"Early filers are all about my refund, 'I want my refund now,' so that's going to impact them negatively," says Bob Meighan of Turbo Tax.

He says the IRS' decision to delay the processing of all returns until Jan. 30 was the result of the late debate in Congress over the so-called "fiscal cliff."

So how long will it take to process electronic returns?

"The IRS is now giving guidance that it's going to be as long as 21 days, but that's to set the expectation of 21 days.  Normally, we find the processing is much quicker," Meighan says.

Copyright 2013 ABC News Radio

Thursday
Dec202012

Fiscal Cliff Debate May Delay Tax Refunds in 2013

iStockphoto/Thinkstock(NEW YORK) -- If you depend on an early tax refund to help pay for large holiday credit card bills you could be out of luck.

The last-minute debate over the fiscal cliff may delay tax refunds in the new year.  The IRS is likely to be very busy dealing with changes in the tax code.

"There's a high possibility that the tax filing season could be further delayed," says Kathy Pickering, executive director of The Tax Institute at H&R Block.  "We're recommending that people be aware of that."

"Either if you need to modify your holiday spending or make arrangements to pay bills in February that you would otherwise pay in January," she says.

Copyright 2012 ABC News Radio

Monday
Dec032012

GAO Report: Alarming Rise in IRS Refund ID Thefts, Few Prosecuted

iStockphoto/Thinkstock(WASHINGTON) -- A new government report charts an alarming rise in tax return refund identity thefts and finds that few of the thefts are even investigated by the Internal Revenue Service (IRS).

The U.S. Government Accountability Office (GAO) report said the IRS identified 641,690 incidents of identity theft involving tax fraud this year as of Sept. 30.  That is an increase of 62 percent from the 232,142 incidents reported in 2011.

Just 0.1 percent of these cases initiated criminal investigations and the rest of the crooks were able to keep the ill-gotten gains.  Only 898 criminal investigations were initiated in fiscal 2012, the report said.

"Notwithstanding the IRS's efforts, its resources and ability to resolve cases are stretched thin," according to the Taxpayer Advocate Service's 2011 annual report to Congress.

Beth Tucker, IRS Deputy Commissioner for Operations Support, testified in front of the House Committee on Oversight Thursday, saying, "The IRS is working to speed up and further streamline identity theft case resolution so that innocent taxpayers will experience as little inconvenience as possible."

The dollar volume of fraudulent refunds is not known, according to the GAO.  Financial institutions recognized and returned to the IRS $754 million in tax refunds they found suspicious between January and Sept. 30, 2012.  The GAO said that figure is only a fraction of the total amount of refund fraud.

James White, a spokesman for the GAO, said the nearly 642,000 cases included many attempts by individuals or groups of criminals, but the IRS does not know how many individuals are responsible.

Thieves can obtain a taxpayer's name, and Social Security number in many ways, including hacking into a computer system or stealing paper files at one of the many organizations that use names and Social Security numbers in their records, including employers, schools and financial firms.  They then file a fraudulent tax return seeking a refund, often early in tax filing season before the real taxpayer files.

IRS officials said that "one of the challenges they face in combating this type of fraud is its changing nature and how it is concealed," the GAO report stated.

"While perfect knowledge about cases and who is committing the crime will never be attained, the better IRS understands the problem, the better it can respond and the better Congress can oversee IRS's efforts," the report continued.

The IRS has said it is pursuing ways to detect, resolve and prevent identity theft-based refund fraud, including a new filtering process that analyzes tax return characteristics.  On its website, the agency offers tips for those who believe their tax records have been affected by identity theft and how to prevent it:

  1. Don't carry your Social Security card or any documents with your SSN on it.
  2. Don't give a business your Social Security number just because it asks.
  3. Check your credit report every 12 months.
  4. Protect your personal computers by using firewalls, anti-spam/anti-virus software, update security patches, and change passwords for Internet accounts.
  5. Don't give personal information over the phone, through the mail or on the Internet unless you have initiated the contact or you are sure you know whom you are dealing with.

Copyright 2012 ABC News Radio

Tuesday
Apr172012

Tax Return Theft: How to Safeguard Your Refund

iStockphoto/Thinkstock(NEW YORK) -- It is a day dreaded by most Americans, the day taxes are due, but for hundreds of thousands of taxpayers it’s just the beginning of a nightmare where they discover Social Security numbers have been stolen and fake returns filed in their name.

Tax-related identity theft is an exploding problem. The Internal Revenue Service paid out $1.4 billion in fraudulent tax refunds last year to identity thieves who filed false returns, six times more than in 2010.

Experts say the fraud is attractive to scam artists because people are unaware they have been scammed until their tax return is rejected.

The fraud is perpetrated in three ways:

  1. A crook files a tax return using your name and Social Security number before you file your own.
  2. A crook uses your Social Security number when hired for a job and the income from that job shows up as yours.
  3. A crook steals the Social Security number of a child or elderly dependent of yours and claims them.

In order to minimize the likelihood of becoming a victim of identity theft the IRS has these recommendations:

  • Don’t carry your Social Security card or any document with your Social Security number on it.
  • Don’t give a business your Social Security number just because they ask for it. Only give it when it is required.
  • Check your credit report every 12 months.
  • Secure personal information in your home and on your computer.
  • Don’t give personal information over the phone or the Internet unless you initiated the contact or are sure you know who you are dealing with.

If you believe you are a victim of tax-related identity theft, here’s what you should do:

  • File a report with the Federal Trade Commission’s Identity Theft database.
  • Call the FTC’s hotline for individual ID theft counseling: 1-877-ID-THEFT
  • Place fraud alerts on your credit reports at www.experian.com, www.equifax.com and www.transunion.com.
  • Contact the IRS Identity Protection Specialized Unit, toll-free at 800-908-4490.
  • Visit the IRS Taxpayer Advocate Service, which has a helpful toolkit, here.
  • Fill out the IRS Identity Theft Affidavit, Form 14039.

Copyright 2012 ABC News Radio

Friday
Mar162012

Fewer People Plan to Spend Their Tax Refunds on Vacations

iStockphoto/Thinkstock(NEW YORK) -- Using federal or state tax refunds to pay for a vacation seems like a good idea, but just 10 percent of Americans are planning to do so this year, a 20 percent drop from 2011.

The finding comes from a survey of 1,005 U.S. adults commissioned by Taxsoftware.com.  Most of the Americans surveyed said they will instead use their refunds to pay off debts or add to their savings or investments.

The decision to pay down debt rather than use the refund to cover a vacation is just one of several dramatic differences between surveys taken in 2011 and 2012.

Here’s a breakdown:

In 2011, 31 percent planned to use the refund to make home improvements.  For 2012, it’s eight percent.

In 2011, 23 percent planned to use the refund to buy products such as cars, electronics or furniture. For 2012, it’s eight percent.

In 2011, 15 percent planned to give their refund to charity. For 2012, just two percent plan to do so.

In 2011, 59 percent planned to use the refund to pay off debts. For 2012, it’s 29 percent.

In 2011, 19 percent planned to use the refund to mortgages or education loans. For 2012, five percent.

In 2011, 66 percent planned to use the refund on savings and investments. For 2012, it’s 27 percent.

Respondents were allowed to choose more than one way on how they plan to spend their refunds.

Copyright 2012 ABC News Radio

Tuesday
Mar132012

Survey: Fewer People Plan to Spend Their Tax Refunds on Vacations

Comstock/Thinkstock(NEW YORK) -- Using federal or state tax refunds to pay for a vacation seems like a good idea, but just 10 percent of Americans are planning to do so this year, a 20 percent drop from 2011.

The finding comes from a survey of 1,005 U.S. adults commissioned by TaxSoftware.com.  Most of the Americans surveyed said they will instead use their refunds to pay off debts or add to their savings or investments.

The decision to pay down debt rather than use the refund to cover a vacation is just one of several dramatic differences between surveys taken in 2011 and 2012.

Here’s a breakdown:

-- In 2011, 31 percent planned to use the refund to make home improvements.  For 2012, it’s 8 percent.
-- In 2011, 23 percent planned to use the refund to buy products such as cars, electronics or furniture. For 2012, it’s 8 percent.
-- In 2011, 15 percent planned to give their refund to charity.  For 2012, just 2 percent plan to do so.
-- In 2011, 59 percent planned to use the refund to pay off debts.  For 2012, it’s 29 percent.
-- In 2011, 19 percent planned to use the refund to mortgages or education loans.  For 2012, 5 percent.
-- In 2011, 66 percent planned to use the refund on savings and investments.  For 2012, it’s 27 percent.

Respondents were allowed to choose more than one way on how they plan to spend their refunds.

Copyright 2012 ABC News Radio

Friday
Mar092012

States Slow to Recoup Billions in Improper Unemployment Payments

Adam Gault/Thinkstock(NEW YORK) -- Billions in taxpayer dollars were improperly paid out in the form of unemployment insurance benefits last year and, as ABC News has learned, many states have been slow in trying to get that money back.

In 2011 alone, the government paid out $11 billion to people who either were intentionally cheating the system or accidentally violated the rules, according to the U.S. Department of Labor.  In other words, some people who no longer qualify for benefits are still collecting.

The Labor Department says there is a tool to help states recoup the funds but ABC News has learned that only a few state governments are actually using it.

So far only New York, Wisconsin, Pennsylvania and Michigan are actively working with the Treasury Department to collect improperly distributed payments, with more than 20 other states planning to join in the future.  That means that half of the country is not yet using this tool to help regain billions in wrongly disbursed unemployment funds.

The Labor Department says that over the last three years, Texas has paid out more than $1 billion improperly.  In California, unemployment recipients were paid more than $1.7 billion in error or under fraudulent circumstances.  What's more, the government agency says more than 40 percent of unemployment payments paid out in Louisiana and Indiana were improper funds.

Still, none of these states are utilizing programs and resources that would help directly collect improper payments, such as the Treasury Offset Program (TOP).

Under the TOP program, the IRS allows states to withhold the tax refunds of people who have received improper compensation to recoup the lost funds.

Assistant Secretary of Labor Jane Oates told ABC News that outdated computer software at the state level is a major reason why so few states have been taking part in the program since it was started in January 2011.

"Our states have really let their infrastructure systems become obsolete," Oates said.  "So therefore, when new programs become available, their systems aren't able to handle them.  So it does require an investment on the range of millions of dollars."

At a time when cash-strapped states are slashing budgets because of deficits, it's an investment few states have been willing to make.

Copyright 2012 ABC News Radio

Tuesday
Jan312012

Tax Refunds Delayed for Early Filers This Year

Ryan McVay/Photodisc/Thinkstock(WASHINGTON) -- If you're one of the people who already filed your tax returns in the hopes of getting a refund back fast, Uncle Sam has some disappointing news for you.

The Internal Revenue Service says some taxpayers may have to wait a week longer than initially projected to get their money back as it works on tweaking its computer systems to prevent refund fraud.

"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.  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 in an alert.

The delay affects taxpayers who filed returns before Jan. 26, IRS spokeswoman Michelle Eldridge told USA Today.

Copyright 2012 ABC News Radio

Monday
Jan232012

Coffee, Lunch Spending Tops Tax Refunds

Gerald Zanetti/FoodPix(NEW YORK) -- Want to save $2,000 a year? Pack your lunch. Wanna save another grand? Fill a thermos with coffee while you’re at it.

The average amount working Americans spend on coffee and lunch is more than the average tax return refund they will receive, with two-thirds of American workers buying their lunches, according to a survey by Accounting Principals, a staffing and recruitment firm. The average spent on lunch alone is $37 a week, or $2,000 a year.

The survey found noticeable workplace spending differences by gender and age. Men spend $46.50 a week while women spend $26.50 on lunches.

Americans spend more money on their lunches than on their commuting costs, which was an average of $123 a month, or $1,500 a year.

Accounting Principals asked Braun Research to conduct a telephone survey of 1,000 employed Americans, 18 and older, from Dec. 22 to 27. The survey found men tend to purchase and spend more on coffee than women, 54 percent and 45 percent, respectively.

Half of Americans buy coffee regularly at work, spending more than $20 a week, or $1,000 a year. Younger professionals ages 18 to 34 spend nearly twice as much on coffee -- $24.74 -- during the week than those ages 45 and up -- $14.15.

The average tax refund in 2011 was $2,913, according to Yahoo! Finance.

Americans are not planning to use their year-end bonuses on food or drink, however. The survey found 57 percent of employed Americans plan to use their year-end bonus to pay off debt.

And, according to the survey, one-third of employees have a financial goal of bringing their lunch to work in 2012.

Copyright 2012 ABC News Radio







ABC News Radio