Why does the IRS delay refunds for people with Earned Income Credit?

Question

I’ve seen articles and headlines mentioning that the IRS holds tax refunds for those with Earned Income Credit until mid february but have never got an explanation as to why.

In: 2

Answer 1

To my understanding, its a measure to try to prevent malicious actors from sending in a falsified return (stealing a victim’s identity) to claim those large valued credits for themselves.

Delaying such returns would identify situations where multiple returns are filed for the same person before any payments were made.

The Protecting Americans from Tax Hikes Act (2015) was the law that specified that delay period.