Why your tax refund will be delayed in 2017

MEMPHIS, Tenn. -- For many Memphians, their tax refund is the largest, single amount of money they'll get at one time all year.

Shirley Clay already knows how she'll spend it.

"Pay my bills," Clay said to WREG.

"Many have plans for that money," tax preparer Kenneth Herron added.

Those are plans that will have to be put on hold for many Mid-South residents.

A new law going into effect in 2017 will delay tax refunds for thousands of middle and low-income Shelby County taxpayers.

Herron said it will hit those who file early especially hard.

"So, normally they would come in as soon as the season opens to file their taxes and in past years, getting their refund within 21 days. Now that's not going to happen."

The new rule affects taxpayers who claim the Earned Income Tax Credit and the Additional Child Tax Credit.

The IRS will be holding the entire refund for taxpayers who claim those two credits until at least February 15.

The agency is taking a closer look at those returns to combat fraud and identity theft.

Herron said taxpayers should be prepared to submit more documents too.

"They might as well bring in their birth certificates. They might as well bring in documents showing they provided for their dependents."

Herron said it's taken the IRS a while to come up with more tools to help prevent fraud, and this extra filter is one of the results.

Debbie Stevens said she's had friends who were the victims of tax ID theft.

"They make it very difficult for someone whose ID has been violated to resolve all of this. I hope that these extra precautions keep that from happening."

Either way, it'll mean more steps for taxpayers and preparers like Herron.

The IRS said although it can't issue refunds to some filers before Feb. 15, the turnaround time for the refund will still be around three weeks.