Third Stimulus Check: Tax Refunds and Stimulus Checks Delayed by Identity Fraud Crossfire – NBC Los Angeles
- According to the Taxpayer Advocacy Service, the IRS reported a tax refund of 5.2 million last year for fraud. This is an increase of almost 50% compared to 2019. Of these, about 1.9 million were tagged with ID screening.
- According to the organization, in 2019, 63% of scrutinized refunds for identity theft proved to be legitimate. About 18% of flagged refunds took more than 120 days to arrive.
- The IRS has protected a $ 2.5 billion loss with the 2019 Personal Information Theft Filter.
Jeff Lavigne will use tax refunds for postponed medical assistance this year.
Still, records show that his refund, nearly $ 2,700, has been at a loss since Ravine filed his tax return in mid-March.
The IRS has flagged the recovery of the potential for personal information theft, as it did last year for nearly two million Americans.
Other articles on personal finance:
That’s why cryptocurrencies crash on weekends
Who Can Help Most From Student loan Forgiveness
ETFs Identify New Risks: Unidentified Aerial Phenomena
Money was withheld until Lavigne could confirm his identity. This process has proven difficult — the phone line is blocked and online authentication is not available.
42-year-old Lavigne suffers from chronic back pain, which makes her job difficult for a long time. Former restaurant manager does not have a full-time job or health insurance. An additional $ 2,700, including the Pandemic Stimulation Fund, will help pay monthly premiums and allow him to visit an expert.
“I started planning in my head in terms of getting the help I needed,” said Ravine, who lives in the suburbs of Dallas. “I’m trying to take one step at a time. This is one step.”
Delayed tax refund
The number of taxpayer refund delays during the 2021 filing season is unknown. But that’s a problem for more and more Americans.
The IRS reported a 5.2 million tax refund last year for fraud. This is an increase of almost 50% compared to 2019. according to To Taxpayer Advocate Service, an independent organization within the IRS.
Of these, about 1.9 million were flagged for ID screening. (The rest was allocated to confirm income.)
Basically, the IRS wants to prevent fraudsters from using their taxpayer’s identity to claim a tax refund. The agency will mail the letter ( 5071C or 6331C letter) If you suspect cheating, ask the taxpayer. The IRS will not be able to process or refund your tax return until the person responds.
However, most flagged returns are not fraudulent. According to the Taxpayer Advocate Service, in 2019, 63% of scrutinized refunds for identity theft were found to be legitimate.
In these cases, the IRS will eventually issue the money (with interest), but taxpayers may have to wait months. According to the Taxpayer Advocate Service, it took more than 120 days for about 18% of identity-flagged refunds to arrive. (In most cases, it takes less than 21 days for online filers and less than 6 weeks for returns by mail.)
Refund delays are one of the top 10 most serious taxpayer problems in 2020 and are taxpayer advocacy services. Said..
Dan Heron, a certified financial planner and accountant, waited almost a year after filing his tax return in 2019 to reimburse his taxes. This was flagged as a potential spoofing scam.
Heron, Principal of Elemental Wealth Advisors in San Luis Obispo, California, said:
“I hope [the IRS] I had something more streamlined, “he added.
According to Nina Olson, executive director and founder of the Center for Taxpayer Rights, the Covid pandemic could have exacerbated the delay as the IRS had to suspend some of its face-to-face operations.
And this year, taxpayers may be more burdened than usual. The IRS will use the 2020 tax return to qualify for a pandemic stimulus check. Prepaid child tax deduction, Will be paid monthly from mid-July.
If the 2020 returns are not processed, the agency will use the 2019 returns information (such as annual income). However, depending on the taxpayer’s situation, it can lead to reduced or no payments.
“In the end they may get their money, but they aren’t receiving their money right now,” Olson said.
Defenders of taxpayers do not dispute that thieves are prevented from stripping individuals and that the government is a valuable goal.
“Personal information theft has been on the rise since 2005,” Olson said. “That’s a big problem.
“And the thieves are getting smarter.”
According to authorities, the IRS fraud protection protected $ 3.5 billion in revenue in 2019. (Approximately $ 2.5 billion comes from personal information theft filters.)
And 98% of tax returns claiming refunds weren’t caught by the process, officials said.
“We understand the concerns about the impact of late refunds on taxpayers and will continue to work with our internal and external partners to improve and automate refund fraud filters as needed.” The IRS responded to taxpayer advocacy services. report To last year’s parliament.
Without proper verification, the IRS is at risk of improper refunds, officials said.
However, taxpayer advocates say the IRS system, staffing and processes combine to delay most of the refunds.
For example, many are given the option to verify their identity online using the IRS website. To do this, you first need to go through an authentication process called “secure access.” However, according to the Taxpayer Advocate Service, less than half were successful in 2020.
Such taxpayers will need to contact the IRS agent by phone or at the field office for resolution. According to Olson, the IRS currently does not have enough staff to manage volumes efficiently.
Also, the IRS technology does not take advantage of machine learning. This means that if there are too many legitimate taxpayers, the system will not be able to adapt automatically. You need to fix it manually.
“You have set a goal to stop fraud, but you haven’t set a goal to minimize false positives,” Olson said of the IRS. “And a good system does both.”
The fraudulent letter requires a response within 30 days, but according to the IRS, the IRS will continue to work with taxpayers regardless of how many days have passed.
Mark Mazur, Deputy Assistant Secretary of Taxation for the Treasury, said the IRS budget, which primarily targets personnel, has fallen by a real 20% over the last decade. Said During a hearing of the House of Representatives on Thursday.
“The IRS did not have sufficient resources to address enforcement and administrative challenges and provide customer service to taxpayers,” said Mazur.
He added that technology upgrades would also improve services by allowing taxpayers to communicate with the IRS in a “clear and timely manner.”
Ravine had been thwarted at each point in time by the time CNBC first spoke to him on Tuesday.
Due to the large number of calls to the agency, he was unable to verify his identity online and contact the telephone representative. He was unable to make a reservation at the local branch.
Mr Ravine wasn’t even sure if he could meet in person. He said long trips were prohibited due to spinal problems.
But on Thursday, Ravine’s luck changed.He was able to contact someone by phone Regional office Located in Farmers Branch, Texas. After an hour and a half, the person in charge completed the verification over the phone, according to Ravine.
“She has a very long list of filters to reduce identity theft, and no one knows how it works exactly, just as a thief can’t create a way around it. “He recalled their argument.
Currently, it can take up to 9 weeks for the funds to arrive.
“She said it’s definitely good for me to go now,” Ravine said. “But if you don’t receive your check or another letter by the end of the nine weeks (sometime in August), [she said] I’ll call you back. “
Tax Refunds and Stimulus Checks Delayed by Identity Fraud Crossfire – NBC Los Angeles Source link Tax Refunds and Stimulus Checks Delayed by Identity Fraud Crossfire – NBC Los Angeles