Client Relationships How to Communicate Tax Refund Delays to Your Clients Read the Article Open Share Drawer Share this:Click to share on Twitter (Opens in new window)Click to share on Facebook (Opens in new window)Click to share on LinkedIn (Opens in new window) Written by Mike D'Avolio, CPA, JD Modified Jul 27, 2016 2 min read It’s human nature to want any remuneration right away, especially when it comes to money coming from a government agency. However, the overall message to taxpayers and your clients should be, “Although your federal or state tax refund may be slightly delayed, it is for good reason.” That “good reason” has to do with fraud. The federal and state taxing agencies are implementing important, new anti-fraud measures to stem the tide of the ever-growing problem of tax refund fraud. If the government doesn’t implement such measures, the opposite result is a lot worse. In the event that your information is stolen and a fraudster has your tax refund issued to them, it could take up to a year for the agency to correct the problem and issue the refund to you. Internal Revenue Service. The IRS, state agencies and the tax preparation industry collaborated during the recent Security Summit in March 2015, and decided to implement new safeguards and standards to combat stolen identity refund fraud. Through password requirements, account validation and information sharing, the taxpayer’s identity is verified more securely, and tax refund fraud is much less prevalent. The IRS expects to process nine out of 10 federal tax refunds within 21 days, despite having implemented these new anti-fraud measures. State Taxing Agencies. With the increase in identity theft and tax refund fraud, state taxing agencies are taking extra precautions to make sure tax refunds are going to the taxpayer and not to the criminal. Although this process may slightly delay tax refunds, the taxing agencies are focused on getting it right instead of getting the refunds out the door in a hurry. However, taxpayers may not notice much of a difference at all, while others may be contacted by their state agency to prove their identity by providing a driver’s license or answering ID verification questions. Some states are notifying the public about possible processing delays, as well as urging employers to quickly file Form W-2s so that the taxpayer’s earnings can be validated. For example, Illinois won’t issue refunds until March in order to implement new security protocols. A new law enacted in Utah prevents refunds from being issued before March 1, unless the employer and employee have filed their required tax forms. Editor’s Note: Interested in learning more about fraud and security? See our other articles on this topic! Previous Post Tax Procrastinators: How to Encourage Your Client to File on… Next Post Firm of the Future Profile: Mariette Martinez, EA Written by Mike D'Avolio, CPA, JD Mike D’Avolio, CPA, JD, is a tax law specialist for Intuit® ProConnect™ Group, where he has worked since 1987. He monitors legislative and regulatory activity, serves as a government liaison, circulates information to employees and customers, analyzes and tests software, trains employees and customers, and serves as a public relations representative. More from Mike D'Avolio, CPA, JD Comments are closed. Browse Related Articles Tax Law and News Consultant Spotlight: John Trammell Practice Management Why you should care about green cloud computing Practice Management Consultant spotlight: Steven G. Advisory Services Understanding your client’s relationship with mon… Practice Management Consultant spotlight: Jonathan Lovitt Practice Management ProConnect™ Tax spotlight: Megan Leesley, CPA Tax Law and News Boo! Extension season horror stories Tax Law and News Tax relief for victims of Hurricane Milton Practice Management Tax Season Readiness virtual conference—Nov. 13-14 Practice Management Lacerte® Tax spotlight: Tania Santos, EA