tax refund

5 Reasons You May Not Get Your IRS Tax Refund

Tax season is upon us and if you’re expecting an IRS tax refund you’re probably quite eager to see that check. After all, the IRS says the typical tax refund tops $2,600 – a nice chunk of change.

Normally, most taxpayers get their IRS refunds very quickly, especially people that file their tax returns electronically. In fact, the IRS says that 9 out of 10 refunds in 2015 will be issued in less than 21 days.

But an IRS tax watchdog says budget cuts will slow customer service at the IRS and lead to a nightmare 2015 tax-filing season.

So many Americans may be worried about not getting a speedy tax refund – or perhaps not getting a tax refund at all.

Here are 5 reasons why you may not get your IRS tax refund.

  1. You already owe the IRS money.

If you were hoping that the IRS didn’t notice that you did not file a tax return for the past three years or that you ignored their Notice and Demand for Payment — which they sent to you six months ago — guess what? You were sadly mistaken.

When you owe the IRS money, they can take any tax refund you were expecting, in addition to doing things like placing a lien on your property or seizing other assets, like money in your bank account.

(Related: 10 Things to Know If You Owe Money to the IRS).

  1. You were the victim of identity theft.

Tax-related identity theft is a major problem in the U.S. and the issue has only gotten worse over the years. During the past five years, I’ve written dozens of articles about this topic. If you’ve watched programs like “60 Minutes,” you’ve also seen investigative reports in 2014 about the rampant rise of people filing fake tax returns and getting fraudulent refunds. “60 Minutes” called it the biggest IRS scam around.

The problem, in a nutshell, is that con artists often use other people’s social security numbers in order to receive bogus tax refunds. If this happens to you, by the time you get around to filing your legitimate tax return it’s too late because the crooks have beat you to the punch.

The end result is that the IRS winds up sending you a letter or an electronic notice saying that your social security number has already been used in order to claim a tax refund. You can work out this nightmare situation. But it’s a pain to deal with, and it will take time — a very long time.

Check out this video I created or read my advice on what to do if someone stole your social security number to file taxes.

You can also read my ideas on how to find out who stole your social security number.

Lastly, be sure to review my tips on how to safeguard your tax refund and your credit from identity theft.

YouTube video

  1. You forgot to sign your tax return.

Believe it or not, scores of tax returns are rejected for one simple, but significant reason: the taxpayer forgot to sign the tax return. In these cases, the IRS will kick your return back, delaying your refund until you put your signature on the return.

By the way, just like with a paper return, even if you file a tax return electronically, or even if you live out of the country, you still must sign your 1040 or 1040 EZ tax form. Otherwise, it is not considered a valid return.

The IRS offers two methods of signing an individual tax return with an electronic signature. Basically, your “signature” is a 5-digit PIN that you create.

  1. You filed an incorrect tax return.

Another common blunder people make is submitting incorrect data on their tax returns. Problems like social security numbers being listed incorrectly, or math errors and numbers transposed can all delay or derail your tax refund.

  1. Your tax refund conflicts with new IRS direct deposit rules.

Because tax identity fraud cost the government $5.2 billion in the last tax year alone, the IRS has new rules regulating tax refund checks that are being paid via direct deposit. These rules started in January 2015.

To stop crooks from getting multiple tax refunds, the IRS now puts a cap on the number of refunds that can be electronically deposited into a single financial account or pre-paid debit card. The limit is three. The limit applies to savings and checking accounts, prepaid cards, reloadable cards and debit cards.

Therefore, if you or other members of your family (say, your parents or children) have already had several refunds sent to any of you electronically in the same financial account, but you’re still expecting an additional refund, the IRS will send you a notice advising you that your direct deposit limit has been exceeded.

The agency will then inform you that you will receive a paper-based refund check, rather than the direct deposit you requested. Assuming no other issues or problems with your tax return, your paper refund check will get to you in roughly four extra weeks, according to the IRS.

So what should you do if it’s been three or four weeks since you filed your tax return and you still haven’t gotten that much-anticipated tax refund check?

The IRS has a special section on its website called Where’s My Refund? You can go there and check the status of any tax refund you were expecting. Generally speaking, you should get a refund in about 21 days after your filing. Don’t call the IRS before then.

To check on a refund using the Where’s My Refund tool or the IRS2Go mobile app, you’ll need to have three pieces of information handy:

  • Your Social Security Number, or Individual Taxpayer Identification Number
  • Your Tax Filing status (such as Single, Married Filing a Joint Return, or Head of Household)
  • Your Exact Refund Amount

The good thing about using the IRS to track your refund is that the Where’s My Refund? Tool shows you the progress of your tax refund through 3 stages: (1) Return Received, (2) Refund Approved and (3) Refund Sent.

Based on your personal tax return and circumstances, the IRS will also tell you a specific refund date, as soon as the IRS processes your tax return and approves your refund.

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