New law to crack down on fraud could delay tax refunds

SOME TAXPAYERS could face delays in getting their tax refunds this year, as a new law designed to combat fraud comes into effect, according to H&R Block.
SOME TAXPAYERS could face delays in getting their tax refunds this year, as a new law designed to combat fraud comes into effect, according to H&R Block.

KANSAS CITY, Mo. – Some taxpayers could face delays in getting their tax refunds this year, as a new law designed to combat fraud comes into effect, according to H&R Block.

The tax-preparation company has opened 10,000 offices nationwide to serve clients this tax season, and last week released a list of top tax concerns, including the increased threat of tax identity theft and uncertainties surrounding the Affordable Care Act.

“We know taxpayers want to do more than just get their taxes done, which is why we are here to make sure they get their taxes won,” said Karen Orosco, senior vice president of H&R Block U.S. Retail Sales and Services.

The IRS this season expects 153 million tax returns, with approximately three-fourths of those returns receiving a refund. The average refund this year should be about $2,900, according to H&R Block.

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The company is warning customers about a newly enacted law, Protecting Americans from Tax Hikes Act, which could impact as many as 15 million taxpayers, according to a press release. The new law, designed to cut down on fraud, could delay refunds especially for those who claim the Earned Income Tax Credit or Additional Child Tax Credit who file early.

Also, with stricter protocols surrounding the issue of tax identity fraud, H&R Block says taxpayers could lose access to their refund for four months or more, as the IRS is taking new and multiple steps to verify a completed return.

Penalties under the ACA, popularly known as Obamacare, are also increasing this year for taxpayers without health insurance. For the 2016 tax year, taxpayers without coverage will pay $695 per adult plus $347.50 per child up to a maximum of $2,085, or 2.5 percent of their household income, whichever is greater.

Finally, due to a federal holiday, the tax deadline this year will be April 18.

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