> the reasons why refund fraud remains a problem have to do with timing ... the IRS is under tremendous pressure to issue refunds quickly
They wouldn't be under that pressure if they weren't holding peoples' money. It's crazy.
Instead of a system where everybody expects to get a small refund every year, we need a system where everybody expects to make a small payment every year. Getting a refund from the IRS should be unusual. Unusual enough that they can afford to scrutinze refunds closely.
If you don't have the money when the bill comes due the IRS just compounds it into next year by increasing your withholding for next year. With interest, of course. The idea here is that the withholding amount is chosen by the IRS, not by the employee. An automated system to do this already exists: it's how wage garnishment happens.
At worst you can stall the tax collector for an extra year under this system compared to the existing system. This will still be cheaper for the government than getting massively defrauded every single year because they owe a few HUNDRED MILLION people a payment within a very short timeframe. No entity on earth can issue that many payments that quickly without getting robbed on a regular basis.
They wouldn't be under that pressure if they weren't holding peoples' money. It's crazy.
Instead of a system where everybody expects to get a small refund every year, we need a system where everybody expects to make a small payment every year. Getting a refund from the IRS should be unusual. Unusual enough that they can afford to scrutinze refunds closely.
If you don't have the money when the bill comes due the IRS just compounds it into next year by increasing your withholding for next year. With interest, of course. The idea here is that the withholding amount is chosen by the IRS, not by the employee. An automated system to do this already exists: it's how wage garnishment happens.
At worst you can stall the tax collector for an extra year under this system compared to the existing system. This will still be cheaper for the government than getting massively defrauded every single year because they owe a few HUNDRED MILLION people a payment within a very short timeframe. No entity on earth can issue that many payments that quickly without getting robbed on a regular basis.