Starting from January 2015, the Internal Revenue Service will reduce the amount of money that can be electronically deposited to a taxpayer’s account as a tax refund. This is one of the changes made by the IRS in order to reduce consequences of a tax fraud and identity theft that became a common problem in the US over the past few years.
According to the new rule, if your anticipated tax refund exceeds a certain amount of money, the IRS will send you a notice via mail to explain the situation, and then issue a paper check to you, which will also come by mail.
Although the IRS is aware that this decision might be inconvenient for some taxpayers, such as families with many children, the government still believes that the benefit of this new rule outweighs its disadvantages. For those taxpayers who are expecting a refund, the IRS strongly recommends using an online tool called Where’s My Refund, which can be found on the IRS website. This will give you an idea when you can expect your money back from the government, because it might take about four weeks for your paper refund check to be mailed to you.
Another change in the refund policy made by the IRS is eliminating a possibility for tax preparers to get paid for their services by splitting taxpayers refunds and requesting to deposit some of this money to their bank accounts. According to the IRS, if a tax refund does not exceed a certain amount and can be issued to a taxpayer by using a direct deposit, it can only be deposited to an account that has the taxpayer’s name. Tax preparers who violate this law and still try to receive a portion or all of their client’s refund will be subjects to penalty under the IRS Code.