IRS Blames New Anti-Theft Safeguards for Delayed Refunds

CPA Blog readers might remember that on Jan. 11, we reported that the IRS said technology improvements would allow it to issue refunds to some taxpayers in as few as 10 days, if they e-file and select direct deposit.

Well this week, the IRS issued a caveat of sorts: AccountingToday reports that as the IRS continues to iron out kinks of its new anti-fraud safeguards taxpayers should expect at least a one-week delay in receiving income tax refunds.

The IRS announced in an email to tax professionals yesterday that as the result of increased protections against taxpayer identity theft, refund payments may be issued later than initially estimated for 2011 tax returns, AccountingToday said Thursday. Although some taxpayers who have efiled received refunds even sooner than the IRS' projected minimum of 10 days from filing, yesterday's email noted that taxpayers should expect refunds to be issued within the typical 10- to 21-day timeframe after filing electronically, and within four weeks from filing paper returns. Early filers who were expecting their refunds this week should expect to wait another week, the IRS warned.

An uptick in recent years in taxpayer identity theft prompted the IRS to install more stringent fraud protections, resulting in the new safeguards, per the recommendation of the Government Accountability Office.

The "Where's My Refund" function on the IRS website allows taxpayers track the status of their returns and offers an estimated refund delivery date -- but that's just an estimate, and is subject to change, said the IRS email.