IRS Delays Sending Refund Checks To 40 Million Poor Households To 'Fight Fraud'



It seems like no matter how much money you make in the US, you're screwed. With the cost of education getting higher and higher, even if you manage to get a decent paying job after you graduate, there's still the matter of student loans. And more likely than not, if you've got a good paying job, you're probably living in an area with an insane cost of living. 

Then there's the wonderful issue of tax brackets, something I learned about the hard way. Despite filing jointly with my wife and having a kid, and checking with three separate accountants, I needed to pay Uncle Sam a whopping $4,000 in back taxes I owe from a bunch of contracting work I did three years ago.

So, in short, the IRS can go to hell, because despite taking tons of money in taxes, our public school systems, roads, and other social services pale in comparison to other industrialized nations.

Which is why the recent decision by the IRS to delay refunds to millions of low-income families is pretty troubling.

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I'm lucky enough to have had a family support system and a free place to crash/eat food/do laundry at my parent's house for a good chunk of my adult life whenever things got rough. But for the 40 million affected low-income families, that refund check is an important boost to finances.

"For most people, it's the biggest check they are going to get all year. We are sensitive to that," IRS commissioner John Koskinen told AP.

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The delays are directly affecting people who are claiming earned income tax credits along with child tax credit - which is a huge bulk of the working poor in America. Tax filing officially starts on January 23rd, but people who rely on these benefits won't be able to file for these specific credits until February 15th, thanks to a new law.

The ruling is supposed to help give the IRS more time to screen for fraudulent tax returns, saving the government billions of dollars.

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The IRS claims they were able to block $47 billion in fraudulent returns over the past two years and that they doled out $3.1 billion in fraudulent payments in 2013. Which seems like a lot, but when you consider that US corporations dodged $2.1 trillion in taxes using tax havens, it seems kinda silly to go after that IRS chump change just to screw a guy out of affording a slightly better car or Christmas presents for his kids, doesn't it?

Chuck Marr, a director of federal tax policy says that EITC benefits are "a pro-work success" and has proven to encourage citizens to work.

It's for that reason Earned Income Tax Credit has received support from both Democrats and Republicans, because it's been proven to help stimulate the economy, reduce "handouts" and getting people to join the workforce.