Held or Stopped Refunds

The Protecting Americans from Tax Hikes (PATH) Act made the following changes, which became effective for the 2017 filing season, to help prevent revenue loss due to identity theft and refund fraud related to fabricated wages and withholdings:

• The IRS may not issue a credit or refund to you before February 15, if you claim the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) on your tax return.
• This change only affects returns claiming EITC or ACTC filed before February 15.
• The IRS will hold your entire refund, including any part of your refund not associated with the EITC or ACTC.
• Neither TAS, nor the IRS, can release any part of your refund before that date, even if you’re experiencing a financial hardship.

You may get a letter or notice from the IRS saying there’s a problem with your tax return or your refund will be delayed. There are many reasons why the IRS may be holding your refund.

• You have unfiled or missing tax returns for prior tax years.
• The check was held or returned due to a problem with the name or address.
• You elected to apply the refund toward your estimated tax liability for next year.
• The IRS is reviewing your tax return.
• Your refund was applied to a debt you owe to the IRS or another federal or state agency.

Your refunds may be used to pay a debt you owe. There are several ways to deal with an offset refund, depending on if you owe the debt to the IRS or to another agency. Learn more about refund offsets.

You should respond promptly to any IRS notice asking for information such as an updated name or address. Call the number on the notice if you have questions.

• If the issue is unfiled returns, you should complete and file any missing or unfiled returns.
• If you need to change the information on your tax return, you should file an amended return.
• If your election to apply the refund to next year’s estimated tax liability was a mistake (estimated tax payments aren’t needed or required), call the IRS toll-free at 1-800-829-1040 (TTY/TDD 1-800-829-4059) for help.
  • If you choose to have your refund applied to next year’s estimated tax liability, you can’t change your mind and have any of it refunded to you after the due date (without regard to extensions) for filing your return.
• If the IRS is reviewing your return, it may have questions about your wages and withholding, or credits or expenses shown on your tax return. The review process could take anywhere from 45 to 180 days, depending on the number and types of issues the IRS is reviewing.

If your refund paid a debt

• Your refunds may be used to pay a debt you owe. There are several ways to deal with an offset refund, depending on if you owe the debt to the IRS or to another agency. Learn more about refund offsets.

If you provide the information the IRS requested, the IRS should correct your account and resolve the refund issue (generally within 60 days).

If you file a missing or late return, the IRS will process your returns and issue your refunds (generally within 90 days).

If you don’t provide the information or file the missing returns, your refund will be delayed longer.

If you file an amended tax return (IRS Form 1040X, Amended U.S. Individual Income Tax Return), the IRS should make any necessary adjustments and issue the refund (generally within 120 days).

The Taxpayer Advocate Service is an independent organization within the IRS that helps taxpayers and protects taxpayers’ rights. We can offer you help if your tax problem is causing a financial difficulty, you’ve tried and been unable to resolve your issue with the IRS, or you believe an IRS system, process, or procedure just isn’t working as it should. If you qualify for our assistance, which is always free, we will do everything possible to help you.

Visit www.taxpayeradvocate.irs.gov or call 1-877-777-4778.

Low Income Taxpayer Clinics (LITCs) are independent from the IRS and TAS. LITCs represent individuals whose income is below a certain level and who need to resolve tax problems with the IRS. LITCs can represent taxpayers in audits, appeals, and tax collection disputes before the IRS and in court. In addition, LITCs can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. Services are offered for free or a small fee. For more information or to find an LITC near you, see the LITC page on the TAS website or Publication 4134, Low Income Taxpayer Clinic List.