5 New Tax Myths Debunked by IRS
It’s true that this tax season some taxpayers have been unaware of a new rule that requires the IRS to hold tax refunds for taxpayers who claim the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit. As a result, the IRS has acknowledged that there are now a number of “misunderstandings and speculation about refunds.”
To help sort out the truth from the confusion, the IRS has issued a list of refund-related myths:
Myth 1: All Refunds Are Delayed
Not true. Only the refunds of those Taxpayers who are affected by the new law those claiming the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC) are being delayed. Taxpayers not claiming the EITC or the ACTC are not affected by the new law. Keep in mind that than 90% of federal tax refunds are issued in less than 21 days while some tax returns may require additional review and may take longer.
Myth 2: Calling the IRS or My Tax Professional Will Provide a Better Refund Date
Calling either the IRS or your tax professional is not going to help. The best way to check the status of a refund is online through the “Where’s My Refund” tool at IRS.gov or via the IRS2Go mobile app. The IRS updates the status of refunds once a day, usually overnight, so checking more than once a day will not produce new information.
Myth 3: Ordering a Tax Transcript a “Secret Way” to Get a Refund Date
Ordering a tax transcript will not help you find out exactly when you might get your refund. The information on a transcript does not necessarily reflect the amount or timing of a refund. The codes that you’ll see on your tax transcripts do not offer additional information about when your refund will be issued.
Myth 4: “Where’s My Refund” Must be Wrong Because There’s No Deposit Date Yet
The “Where’s My Refund?” tool will be updated with projected deposit dates for early EITC and ACTC refund filers a few days after February 15. Those taxpayers claiming EITC or ACTC will not see a refund date until then. The IRS, tax preparers and tax software will not have any additional information on refund dates.
Myth 5: Delayed Refunds, those Claiming EITC and/or ACTC, will be Delivered on February 15
Remember that the new law will not allow the IRS to release tax refunds until after February 15. That does not mean that refunds will be available on that date. In addition to normal processing times for banks, President’s Day weekend may impact when you get your refund. The IRS cautions that delayed refunds may not start arriving in bank accounts or on debit cards until the week of February 27, assuming that there are no processing issues with your tax return and you choose direct deposit.