IRS Expanding Holds on Tax Refunds for Delinquent Taxpayers

The Internal Revenue Service is currently considering expanding their tax refund delay program, which delays tax refunds for up to six months for delinquent taxpayers. The Treasury Inspector General for Tax Administration has released a report that noted that the IRS has the authority to delay issuing income tax refunds to delinquent taxpayers for up to six months, while the agency investigates tax return delinquencies from other tax years. The report states that holding the tax refund encourages taxpayers to resolve their delinquent filing obligations earlier than they normally would.

“In 2012, the Delinquent Return Refund Hold Program collected nearly $242 million, which was applied to balances due on delinquent returns. From 2008 to 2012, the program held an average of 156,422 tax refunds per year. During that same period, the program secured an average of 64,222 returns from taxpayers per year and coordinated with the IRS’s Automated Substitute for Return program to prepare and post an additional 117,895 substitute returns per year” (Accounting Today).

For additional information, the full article from Accounting Today is linked here.