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Jeff Lavigne plans to use a tax refund this year for long-delayed medical help.
Yet his refund, almost $2,700, has been in limbo since mid-March, when Lavigne filed his tax return, records show.
The IRS flagged the return for potential identity theft — as it did for nearly 2 million Americans last year.
The money has been withheld until Lavigne can verify his identity. The process has proven difficult — phone lines are clogged and online authentication is unavailable.
Lavigne, 42, has chronic back pain that makes work difficult over sustained periods. The former restaurant manager doesn’t have a full-time job or health insurance. An extra $2,700, which includes pandemic stimulus funds, would help pay for monthly premiums and let him visit a specialist.
“I started making plans in my head, in terms of getting the help I need,” said Lavigne, who lives in a suburb of Dallas. “I’m trying to take one step at a time, and this is step one.”
Jeff Lavigne, 42, filed his federal tax return in March. He hasn’t yet received his refund. The IRS flagged the return for potential identity fraud.
It’s unclear how many taxpayers’ refunds have been delayed during the 2021 filing season. But it’s an issue for a growing number of Americans.
The IRS flagged 5.2 million tax refunds for fraud last year, a nearly 50% increase over 2019, according to the Taxpayer Advocate Service, an independent organization within the IRS.
Of those, about 1.9 million were flagged for identity screening. (The rest were earmarked for income verification.)
Basically, the IRS wants to ensure a crook isn’t using a taxpayer’s identity to claim a tax refund. The agency mails letters (either a 5071C or 6331C letter) to taxpayers if it suspects foul play. The IRS can’t process a tax return or issue a refund until the person responds.
However, most flagged returns aren’t fraudulent. In 2019, 63% of the refunds vetted for identity theft turned out to be legitimate, according to the Taxpayer Advocate Service.
While the IRS ultimately issues the money (with interest) in these cases, taxpayers sometime wait months. About 18% of refunds flagged for identity verification took longer than 120 days to arrive, according to the Taxpayer Advocate Service. (Most take less than 21 days for online filers or six weeks for mailed returns, the IRS said.)
Refund delays were among the top 10 most serious taxpayer problems in 2020, the Taxpayer Advocate Service said.
Dan Herron, a certified financial planner and accountant, waited almost a year for a tax refund after filing his return in 2019, which got…
Go to the news source: IRS delays tax refunds, stimulus checks amid identity fraud suspicion