On your marks. With just enough time to recover from the holidays, the Internal Revenue Service opens for business for the 2016 tax year on Monday, January 23. Expecting over 150 million individual returns through the season, the IRS accepts tax filing until Tuesday, April 18, 2017. The usual deadline of April 15 falls on Saturday, which would normally push to the following Monday. Emancipation Day, a legal holiday in Washington, D.C., happens April 17 and so last-minute filers receive emancipation too – for one day.
Not everyone sees benefits from filing on the 23rd, however. Those receiving refunds tied to the Earned Income Tax Credit and the Additional Child Tax Credit – EITC and ACTC, respectively – have an addition wait imposed by a new law. These refunds must be held until February 15, and with President’s Day and weekends, it may be into March before some see these refunds. Despite these complications, the IRS still expects that 90 percent of refunds will turn around in 21 days or less.
Identity Protection – A Benefit of Early Filing
Taxpayers concerned with identity theft and tax fraud affecting their filings have an unintended benefit with early filing. When thieves use actual taxpayer information while attempting to false file, they generally do so early in the tax year, to beat the filing from the legitimate taxpayer. Collecting tax documents and supporting paperwork prior to January 27 gives a taxpayer a head start against tax fraud. While they still need to watch for IRS communications, such as more than one return filed in their name, there’s a better chance that the taxpayer – and not the fraudster – receives the refund.
When the suspicion of tax fraud arises, taxpayers should contact the IRS immediately. The Identity Protection Specialized Unit nationwide number is 1-800-908-4490. Identity Theft Affidavit Form 14039 should also be completed to expedite investigation.
In addition, the IRS recommends the taxpayer notify the following:
• The Federal Trade Commission Identity Theft hotline
• Local police
• Fraud departments of the major credit tracking agencies – TransUnion, Experian and Equifax
• Banks or credit unions with whom fraudulent activity has or may occur.