From the Daily Reckoning…
“...a recent report conducted by the federal National Taxpayer Advocate Service shows that the IRS froze 120,000 refunds last year, citing suspicion of fraud - and never let the taxpayers know why they didn't receive their refund.
The taxpayers in question? Working parents and those who applied for the earned-income tax credit, two groups of people whose median income ranges between $13,330 and $11,956. To add insult to injury, the report showed that 80 percent of these people in question deserved either a full or partial refund of the amount they had originally claimed, which they received over eight months later.
When asked for comment, IRS Commissioner Mark Everson said that the agency would reconsider stalling tax refunds without notifying filers. And, he continued, the IRS would "minimize the number of taxpayers whose refunds are frozen unnecessarily."