$100 Billion in Taxpayer Protection: How the PATH Act Ensures Fairness and Prevents Fraud

Tax Reform and Compliance

How the PATH Act Protects Taxpayers and Prevents Fraud

The PATH Act passed in 2015 aims to prevent tax evasion and ensure compliance with tax rules particularly affecting those claiming credits like the Additional Child Tax Credit (ACTC) and Earned Income Tax Credit (EITC). Early filers claiming these credits must wait until at least February 15 for their refunds as the IRS verifies their information against W-2 forms from employers to reduce errors and fraud.

Fraudulent claims of these credits can lead to severe penalties including a 10-year ban from claiming the ACTC, EITC, or American Opportunity Tax Credit. The PATH Act not only addresses fraud but also enhances certain tax benefits such as making the American Opportunity Tax Credit permanent and allowing 529 plan funds to cover expenses like computers for students, according to the report of The Street.

READ ALSO: 494 Million Settlement: $100 Payments Available To Philips Respironics Device Owners In Class Action Lawsuit!

(photo: BBC)

Understanding how the PATH Act affects tax refunds and benefits

Looking ahead, if lawmakers increase the Child Tax Credit, the IRS will adjust tax returns automatically notifying eligible taxpayers of any additional refunds due. To expedite refunds, taxpayers are advised to file online and opt for direct deposit. Overall, the PATH Act plays a critical role in ensuring fair distribution of tax benefits preventing fraud, and promoting compliance in tax filing.

READ ALSO: $867,171 In Unclaimed Funds: San Diego County Officials Warn Taxpayers To Act Fast Before Refunds Are Lost!