WASHINGTON Feb 22 Federal tax refunds are
arriving later than expected for some lower-income Americans due
in part to closer scrutiny of earned income tax credit claims by
the U.S. Internal Revenue Service, the IRS said on Friday.
IRS employees have been carefully reviewing returns with
claims for the EITC, a frequent fraud target. Fewer than 5
percent of filings claiming the EITC have been delayed, IRS
spokesman Terry Lemons told Reuters.
Those returns are being processed and taxpayers will soon be
able to track their refund on the IRS website, he said.
Wal-Mart Stores Inc, the retailing giant, said on
Thursday it cashed about $1.7 billion in tax return checks at
its U.S. stores so far this year. At this point last year, that
amount was about $3 billion.
In conjunction with the late start to tax season, the
EITC-related delays contributed to the lower level of check
cashing at Wal-Mart, tax preparers said.
Individuals who claim the EITC typically file tax returns as
early as possible for quick cash, said Mark Steber, chief tax
officer at tax preparation company Jackson Hewitt.
More than 13 million Americans in 2012 claimed the EITC - an
anti-poverty program started in 1975 - at a cost last year of
$38 billion, the Treasury Inspector General for Tax
Taxpayers claiming the EITC must meet employment, income and
age requirements to get the refundable credit.
EITC tax refund fraud is common. The IRS this year is asking
EITC taxpayers working with a preparer to prove a child is
living with them by providing, for instance, a report card or
"It's a pain in the derriere for them to come up with this
information," said David Riggs, owner of Accounting Services of
York LLC in Pennsylvania.
Only returns filed with a preparer need to provide this
Families with one child received an average EITC of $2,106
in 2009. That increased to $3,452 for families claiming three or
more children, according to government data.
Once the IRS has paid out an EITC claim, it is "exceedingly
difficult to get it back," said Robert Kerr, senior director of
government relations for the National Association of Enrolled
Agents, a tax preparers trade group. "The IRS has one great
chance to get this right, which is pre-refund."