Tax Refund Challenge

After speaking to a number of people in my circle, it seems to me as though for the first time ever, or that I can remember, Georgia residents are experiencing an influx of tax challenges this year. For many it has been over 3 weeks since they filed their state return but are yet to receive their refunds. Some have received “verification” emails where they are being asked to take a survey to confirm some of the information that was reported on their returns and/or prove their identity. Yet there are others who are being told that despite a clearly noted “refund” on their GA 500 form, they are being told that they “balanced out” and will not be receiving a refund. Still there are others who are being told that the amount they declared as income is not correct even though it matches up with what was reported on their W2’s and they too will not be receiving a refund.  And yet still there are others, like myself, who were unemployed but opted to take taxes out of their unemployment benefits, who are now being told that the GA tax office has no record to support that taxes were actually taken out of their benefits.

As I listen to the stories unfold, it became clear that the state is trying to find ways/reasons not to pay out refunds. When I visited their website to see “where’s my refund”, I was prompted to enter my social security number and the total amount of refund I was expected along with the tax year. Within seconds a message popped up prompting me to call their toll free number to speak with an agent. So I called because I really wanted to know why for the first time in 17 years my state tax refund was not direct deposited into my account. What made it even more puzzling was the fact that despite being filed at the same time, my federal return was already deposited without delay. At the onset of the call there was a warning/disclaimer stating, “due to the January congressional tax law changes, processing dates may be delayed. Please add an additional 2 weeks to the processing time.” Sounds innocent enough and it’s only been three weeks but I was curious about the message prompting me to call to speak with an agent. I figured it had to be more to it because if it was just a routine delay it would say so, right? I should be so lucky.

After what seemed like forever and a day an agent came on the line. I started off by telling him the reason for my call only to have him interrupt me to ask for my social security number. You would think I had learned my lesson by now – to hold off sharing until asked. Anyway, I gave him my social and a few minutes later he told me that based on their records, I was not due a refund because I “broke even.” I asked him what that meant and he said based on my income I was not entitled to a refund to which I challenged his statement by offering that I had not worked all of last year and had no real income to speak of, and that my only income was from my unemployment benefits. In an effort not to be undone I pointed out that I had already received my federal refund for the taxes that were taken out thereof. He then asked if he can put me on hold while he investigated the issue. He then came back with “we have no record showing that taxes were actually taken out of your benefits”. He further went on to say, after I protested of course that I had used my DOL-1099 to complete my return, that if I faxed them a copy of my DOL-1099 showing where state taxes were deducted from my unemployment benefit, a supervisor will review it and make a determination as to whether or not to issue a refund. Needless-to-say I faxed the information over as quickly as humanly possible. So now I wait, but I must admit that I have a lot of questions about the whole “tax” process.

For starts, what is the purpose of having employers or others submit duplicated W2’s or 1099 to the IRS? I thought it was so that they could use them to verify information submitted by tax payers on their tax returns. Then there is the issue of filing electronically. I thought that a copy of your federal return, along with all supporting documents, was submitted with your state return. So why then would the agent claim that they did not get supporting documents showing state taxes were withheld from my unemployment benefits with my return? Here’s my difficulty with believing the agent’s statement. I've filed both my federal and state returns electronically for more than 10 years and never had any issues, including no delay in receiving my refund. What makes this year different? I’m I to believe that the state has stricter guidelines than the feds? I don’t think so.

In searching for answers to my questions I discovered some surprising facts which lead to more questions. With all the recent cutbacks and furloughs plaguing the state, coupled with all the tax law changes which created a backlog of unprocessed returns, it seems the state’s department of revenue is ripe for the picking. Apparently they are hiring anybody these days to process tax returns. One friend shared with me that she knows of someone who is working for the state’s department of revenue processing claims who by all accounts couldn't even pass her math class - wow. Makes you wonder. And what about the Department of Labor and other reporting agencies – are they submitting tax withholding information to the IRS and state department of revenue and if they are doing so, is the IRS/state’s department of revenue practicing due diligence in cross referencing returns with what is being reported?  It seems to me like someone is not doing their job.

Can’t help but wonder if the supposedly “delay” in processing claims and the subsequent refusal to pay out tax refunds are not all a ploy or an attempt to redirect funds someplace else? Thinking of that person who was told her declared income was inaccurate, how does the state plan on proving that the amount is inaccurate if she challenges them, which I hope she does? Especially since the Federal government has already issued her a refund based on the very information the state has chosen to challenge. Like that person, my federal refund was issued without delay. Again, should I then deem that the state has tighter guidelines or evaluation process than the Feds? I think not.

This may very well be the best executed racket by a government agency yet. At a time where people are relying heavily on their refunds to make ends meet, the state’s department of revenue is playing “hide and go seek” with their money. If you live in Georgia and have yet to file or receive your state refund, I urge you; no I employ you to start looking into it. Check on the status of your refund. Ask questions and if you are being told that despite line 24 and line 36 on your GA Form 500 indicating that you are due a refund, that you won’t be getting one, challenge it. Be prepared to prove you are entitled to your refund, i.e., have copies of your W2, check stubs, DOL-1099, other 1099’s, etc. 

This may all very well boil down to the state just taking extra precautionary steps to curtail a rash of fraudulent activities implemented by a small few, but it’s over kill for the rest of the masses. It seems almost unbelievable that it can come down to your having to prove you are who you said you are and are in fact entitled to your refund, but it has. Just goes to show the times we are living in.  I’m just saying – I got issues. What about you?)i(



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