New tax laws mean longer wait for refunds, but more security

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ROANOKE (WSLS 10) - The start of tax season is almost here and new tax laws could lead to a delay in some refunds. It's all in an effort to cut down on the number of fraudulent tax returns filed, which reached more than half a million cases in 2015.

The biggest impact will come to anyone who files for an earned income credit or additional child care credit on their tax returns. The new law will delay them from getting their money back-- pushing their refunds to mid-February, at least.

A delay in those returns will give the IRS more time to verify the refunds, checking them against the W-2's filed by employers. That will help ensure the filings are real and that someone hasn't created a fake tax return in your name.

"They'll get your name and social security number and that's all they need," says David Kembel, owner of Kembel Tax Service. "From there, they'll make up a fictitious tax return, get a tax number from an employer and make up a W-2. They'll add some kids that they can get social security numbers for and give you those kids, whether they're yours or not, and create a tax return that gets a big, big refund."

It's a problem Kembel says he doesn't see very often, but for the three or four people that come into his office each year to find that a tax return has already been filed in their name-- it can be a very frustrating process to sort everything out.

Experts say the key to avoid identity theft is to keep your personal information safe. If you've got old tax documents you're looking to safely destroy-- check out the WSLS 10 Shred-A-Thon. You can have those documents shredded on November 15 in Danville from 10 a.m. to 2 p.m. or in Roanoke on November 21 from 6 a.m. to 2 p.m. Click here for more information.

If you do count on those early tax returns to pay bills or for some extra cash heading into the new year, it's time to start planning now-- experts say those refund checks won't be back as early as we've seen in years before.

The earned income credit is a tax credit for low-to-moderate income earners, particularly those with children. The additional child credit is for someone whose tax credit for their children is greater than the total amount of income taxes they owe.

Anyone claiming those credits will face increased scrutiny and verification, ensuring that a false return is not being filed in their name.

There are two new deadlines this year, one for employers and one for tax returns. For employers-- they're now required to submit W-2 forms to the IRS a full month earlier, to January 30. For anyone who plans to apply for the impacted credits, their refunds won't be processed until February 15 and their tax returns could come back even later.

"We're just going to tell them they have to be patient," says Kembel. "From what they're telling us, the IRS is just going to hold those returns as they come in, until February 15. That gives them two weeks to try to match up a tax return to the real W-2."

Although Kembel Tax Service typically offers early loans against tax returns, it will no longer be offering those for the earned income or additional tax credit returns-- in an effort to further crackdown on the fraud.

Something else you may notice this year is a 16-digit verification code on your W-2. Fifty-million W2 forms will include that verification code that will be included in the tax return for further verification. It's a huge increase over the two-million forms that had the code last year.