MSP #10: TIMING OF REFUNDS
The Speedy Issuance of Tax Refunds Drives Refund Fraud and Identity Theft, As More Research Is Needed on the Costs and Benefits of Holding Refunds Until the End of the Filing Season
IRS RESPONSE TO RECOMMENDATION: The policy decision around any significant change to the timing of refund issuance falls outside the purview of the IRS. The IRS is planning to conduct analysis on the impact of the PATH Act provisions that resulted in accelerated information reporting and delayed refunds to measure its impact on the IRS ability to prevent fraudulent refunds from being issued. However, without knowing the results of this analysis and due to current budget and resource constraints, we would not opt at this time to expand this analysis further.
CORRECTIVE ACTION: N/A
TAS RESPONSE: We are pleased that the IRS is planning to analyze the impact of the accelerated information reporting due dates and the congressional directive to hold certain refunds until February 15. We recognize the IRS is operating under severe resource constraints, but still feel there is much value in exploring the impact to taxpayers, and the savings to the government, if the IRS were to delay the issuance of refunds even further, until after the filing season. We understand that taking such a drastic action would require buy-in from Congress having the IRS share its findings from a research study would help policymakers make a fully educated decision. Given all that the IRS has written in its response, the National Taxpayer Advocate is baffled why the IRS will not take her up on the offer of a joint research study.
ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Not Adopted
OPEN or CLOSED: Closed
DUE DATE FOR ACTION (if left open): N/A