IRS Announces Delay in Some Refunds

Tax Agents Say IRS Experiencing Major Delay in Refunds

By: Tracey Early | News Channel 7
Published: January 26, 2012

The Internal Revenue Service announces a delay in some federal tax refunds.

Jackson Hewitt, H&R Block and other tax preparation companies tell us they received a notice from the IRS stating up to 70 percent of refunds could be impacted for this funding cycle.

The IRS wouldn't comment on what it released to these tax preparation companies.

But it did confirm some taxpayers will be receiving their refunds about one week later than initial projections because of a system adjustment.

Taxpayers and preparers who rely on timely returns are feeling a bit uneasy about the news.

“It’s nerve-racking when you've got two kids at home and you need to get your bills paid,” said Darlene Burke.

Jackson Hewitt said their phones started ringing early this morning.

“Everybody that's expecting money or refunds are calling,” said Beverly Russell, a financial planner for Jackson Hewitt.

He says his office received a memo from the IRS saying they were "researching an issue with their fraud screening and detection process, which could impact between 60 to 70 percent of refunds for this funding cycle. This would include returns accepted by the IRS before 11am on January 18th."

“They're using the term 60 to 70 percent will get delayed,” said Russell. “So that means 30 to 40 percent will get through, so I don't know which 30 or 40 percent is going to be happy or not.”

And it's not just affecting taxpayers. Tax preparation companies depend on those returns for their bottom line during this busy season.

"A lot of the money we receive in terms of fees comes out of refunds. So if the refund is not being funded, then we're being delayed too,” said Russell.

The IRS says the vast majority of taxpayers can still expect to receive their refunds in a timely manner, and that these new safeguards put in place will provide stronger protection against refund fraud.

This does not affect state tax returns.

For those of you experiencing a delay in receiving your federal tax refunds, the IRS is directing people to the "Where's My Refund" section of its website.

You’ll have to enter your Social Security Number, filing status and refund amount to get the information you need.