CERCA Spring Meeting: IRS Prepares for PATH Act’s Impact on Next Filing Season

New provisions in the Protecting Americans from Tax Hikes Act of 2015 (PATH Act) (P.L. 114-113) will impact some refunds next year, Kenneth Corbin, director, Return Integrity and Compliance Services, IRS, said on June 9. Corbin spoke at the 2016 Spring Meeting of the Council on Electronic Revenue Communication Advancement (CERCA) in Arlington, Va.

The PATH Act generally requires that no credit or refund for an overpayment for a tax year will be made to a taxpayer before the 15th day of the second month following the close of that tax year, if the taxpayer claimed the Earned Income Tax Credit (EITC) and/or additional child tax credit on the return. Individual taxpayers are generally calendar year taxpayers. For most taxpayers who claim the EITC and/or additional child tax credit, this rule would apply such that a refund of tax would not be made prior to February 15 of the year following the calendar year to which the taxes relate. The provision in the PATH Act pertaining to the payment of certain refunds applies to credits or refunds made after December 31, 2016.

“The additional time will allow the IRS to verify eligibility,” Corbin explained. “We are going to take W-2 data that is available to us from the Social Security Administration and match it with return data,” Corbin said.

Returns that do not have EITC and/or additional child tax credit claims would not be affected, according to Corbin. “Taxpayers should file as they normally do and return preparers should do the same,” he noted, adding that the Service will be educating taxpayers and preparers about the changes.

Turning to identity theft, Corbin said that personal data are bought and sold on an international black market, placing all taxpayers at risk. “Even with our constrained resources, we continue to devote significant time and attention to cybersecurity. We are aggressively working to create an information sharing data center for the next filing season.” More details will be available later, Corbin said.

By George L. Yaksick, Jr., Wolters Kluwer News Staff



All stories by: CCHTaxGroup

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