|Liberty Tax: Congress, IRS Should Consider Change to Tax Refund Delay Law|
VIRGINIA BEACH, Va., Feb. 14, 2017 (GLOBE NEWSWIRE) -- Liberty Tax, Inc. (TAX) Liberty Tax Service is concerned that the federally mandated refund delay has negatively affected the nation’s economy by helping to create a $45.5 billion year-over-year decline in income tax refund payments in the first two weeks of the tax season. Liberty Tax Service estimates that about 2 million of the nearly 9 million individuals who filed federal income taxes in the first week of tax season were affected by the refund delay, stalling approximately $10 billion in refund spending in the nation’s economy.
The reason for the refund delay – to decrease tax fraud – is positive, but Liberty Tax Service urges Congress and the IRS to work with partners in the tax industry, including Liberty Tax Service, to seek other solutions that do not penalize families and disrupt the economy.
“The timing of the refunds is crucial,” said CEO John T. Hewitt. “Families anticipate that money to pay bills, buy groceries, and catch up on late payments. This delay likely will disrupt many households and have a dramatic effect on the economy.”
Beginning this tax season, the IRS by law cannot release refunds to taxpayers who receive the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC) before Feb. 15. The IRS has said that taxpayers should not expect funds in their bank accounts or debit cards before the week of Feb. 27.
In a Liberty Tax Service poll of over 1,000 taxpayers, more than half who received a 2015 income tax refund said they had spent it in a matter of weeks. About 11 percent of the respondents said their refund money was gone within hours. The poll also showed that more than 40 percent had used the money to pay bills.
“The tax refund is the biggest paycheck many households receive during the year,” Hewitt said. “It’s the way many Americans save money, and they shouldn’t have to wait longer for their money.”
Liberty Tax Service realizes that some families will find it difficult to wait until Feb. 15 or later for their refunds. For that reason, Liberty Tax Service has options available for eligible taxpayers to receive money before February 15.
Liberty Tax Service is a member of the IRS Security Summit that is engaged in finding ways to stem tax fraud. Already the Security Summit has implemented improvements that have helped better identify suspect income tax returns. Liberty Tax Service encourages members of Congress and the IRS to pay close attention to the effect of the refund delay on families and the economy and to continue to work with Liberty Tax Service and other tax preparation companies to find solutions that thwart tax fraud but do not penalize honest taxpayers.
About Liberty Tax, Inc.