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Money January 2017

Dollar Sense

Tax Refund Delays Ahead… But Slower is Better

By Teresa Ambord

Senator McCaskill noted, “These arrests – the largest law enforcement action against these scammers to date – are an enormous victory for the thousands of victims, many of them elderly, whose sense of financial responsibility has been preyed upon by these criminals."

If you’re a taxpayer who rushes to file early, don’t get in too much of a hurry. The tax filing season will begin on January 23, 2017, says the IRS, and the tax agency will begin accepting electronic returns on that day. But taxpayers who are expecting refunds through tax credits will need to wait longer than usual.

More than 153 million returns are expected, about 80% of which will be sent electronically. A new law requires the IRS to hold refunds that involve the Earned Income Credit or the Additional Child Tax Credit until February 15, and taxpayers should not expect refunds before the end of February. Why? While this seems inconvenient, it’s part of an effort to reduce tax fraud. As millions of returns pour in electronically, tens of millions of dollars go out in bogus refunds. The IRS has been ordered to do more verifying of returns to detect and prevent fraud that we all pay for.

Why the change? Just a few years ago, the Treasury Inspector General for Tax Administration (TIGTA) started auditing the IRS – how’s that for turnabout? What they found was mind-blowing. Here are just a few of the findings from one year:

  • In 2012 a whopping 23,944 refunds were mailed to one single address in Atlanta, Georgia, for a total of $46,378,040. Yet, nothing in the IRS processes raised a red flag to suggest there was a problem.
  • A second address in Atlanta received 11,284 separate refunds, for more than $2,164,976.
  • Similar refunds were sent to one address each in North Carolina, Arizona, Florida, and several cities in California.

How did the bogus refunds come to light? TIGTA audits of IRS refunds began in earnest after two IRS employees went to Congress to expose bad practices in IRS management that could lead to fraudulent refunds. TIGTA’s report and subsequent reports were not taken seriously, however, by the IRS, and the fraud rages on. TIGTA’s management said the IRS had left the door to the mint open – taxpayer money – and failed to heed warnings.

Now things are tightening up. So while delayed refunds are not pleasant, if that’s what it takes to put the hammer down on tax refund fraud, it’s a small price.

Note: In previous years, taxpayers have been advised to file early to beat tax refund thieves to the punch. While that may still be a good policy, more scrutiny by the IRS may be the best deterrent of tax fraud.

Then there’s the following story about citizens taking action.


Fed-up Citizens Help Bring Tax Fraud Down: Give Yourselves a Round of Applause

Sometimes your complaints are heard and actually do some good. For the last few years we’ve been getting the news that tax refund scams are rising. In recent years, tax fraud has cost Americans roughly $53 million. Thanks in part to the diligence of taxpayers reporting fraudulent calls that the feds have been able to put the hammer down on tax thieves, reducing tax fraud cases dramatically in recent weeks.

On October 27, 56 people operating five call centers in Ahmedabad, India, were indicted for impersonating IRS agents for fraudulent purposes. Another call center was raided on October 4, in Mumbai, India, also for tax refund fraud. According to the Treasury Inspector General for Tax Administrations, these two actions have resulted in a dramatic decline in reports of attempted tax refund fraud.

TIGTA’s Deputy Inspector General for Investigations, Timothy Camus, said that before the indictments, TIGTA was receiving about 38,000 weekly complaints of IRS impersonation calls. Since the indictments, reported calls have fallen to 2,000 per week – drop of 90%.

But don’t let your guard down because that’s great news. Both the IRS and Treasury Department want the public to know that it’s still important to be on guard. It’s thanks to the diligence of members of the public who reported the suspicious calls that these indictments were possible.

American taxpayers need to remain alert to the possibility of fraud, especially with the new tax season rolling up soon. Thieves know we’ll all have taxes on our minds, and might fall prey to a call purporting to be from the IRS. The IRS reminds us that they do not initiate contact by phone or by email. Therefore, it’s generally safe to assume a call is fraudulent. In addition:

  1. The IRS will not call you to demand immediate payment.
  2. If you do owe tax, the IRS will grant you time to question or appeal the tax bill.
  3. The IRS will never call you to ask for credit card, debit card, or gift card payment.


Politics Aside

Whatever your political leanings, you should be proud of efforts that have brought such good results. Two U.S. Senators, Susan Collins (R-Me.) and Claire McCaskill (D-Mo.) are respectively, the Chairman and Ranking Member of the Senate Aging Committee. They have urged the federal government to increase support to seniors by going after tax impersonators.

Senator Collins told reporters, “I applaud the efforts of our law enforcement in making these significant arrests, which represents the largest single domestic law enforcement action ever involving the IRS scam. I am pleased that the Aging Committee's work to raise awareness about these troubling scams continues to help the Department of Justice track down criminals who are intent on robbing Americans of their hard-earned money."

Senator McCaskill noted, “These arrests – the largest law enforcement action against these scammers to date – are an enormous victory for the thousands of victims, many of them elderly, whose sense of financial responsibility has been preyed upon by these criminals."


Keep on Reporting… It Works!

Are you aware of seniors who have been victims of tax fraud? The Senate Aging Committee maintains a hotline (1-855-303-9470) for these victims. During 2015, the hotline received over 1,100 calls from seniors.

Regardless of age, if you receive a call or email that you suspect may be from an IRS impersonator, report it to the Treasury Inspector General for Tax Administration here:

And also to the Federal Trade Commission at: and be sure to add the words “telephone scam” in your comments.


On a Lighter Note – Have You Ever Wondered…?

If you’ve ever said “he got my goat,” have you wondered where that saying came from?

According to one source, there was an old tradition of keeping a goat in a stable with a race horse. Goats were inexpensive, and had a calming effect on thoroughbred race horses, which by their breeding were high-strung and excitable. Race horses needed to be focused before the race, so the goat was a kind of sedative.

Suppose you were a race horse owner and kept a goat. If an unscrupulous rival wanted to sabotage your chances of winning, he might sneak into the stables the night before the race and steal your goat. By race time your horse would be a nervous wreck and unlikely to win.

The phrase made it into modern day language meaning that if someone upset you, you might say “he got my goat.”


Teresa Ambord is a former accountant and Enrolled Agent with the IRS. Now she writes full time from her home, mostly for business, and about family when the inspiration strikes.

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