More than 26,000 waiting for state income tax refunds

 By Erin Mansfield, VTDigger

Five weeks after the deadline for filing tax returns, more than 26,000 people are still waiting for the Vermont Department of Taxes to issue refunds on their personal income taxes.

Some of those people are very low-income and are planning to use the refunds to pay living expenses, according to Susan Brice, who runs the Vermont Income Tax Assistance program for low-income people. Brice said her job with the tax program runs only from January to late April or early May, but people continue to leave her voicemails asking how to get their tax refunds.

“It’s never been this slow in my seven years of experience,” Brice said. “People haven’t been reporting to me this late in the year that they still haven’t gotten their refunds.” She said the refunds are “amounts that make a difference to a low-income family. They have plans for that money. They had plans months ago for that money. It could be to pay a bill, fix a car that’s not running.”

Brice said the refunds are for substantial dollar amounts in part because low-income people can claim Vermont’s earned income tax credit, or they claim the so-called renter rebate, in which the tax department essentially refunds part of a lower-income person’s housing costs.

The tax department said that, as of Thursday, it was still processing 26,351 refunds for personal income tax returns. The department had issued 198,231 refunds as of Thursday, compared with 208,116 on May 21, 2016.

“We were behind over last year for most of the refunding season, but we’ve caught up at this point,” said Kaj Samsom, the tax commissioner. He said about 12 percent of taxpayers are still waiting. Samsom called it “a big deal” that so many people are still waiting for refunds. “It’s a source of weekly attention from us,” he said, adding that his staff is playing “rapid catch-up.”

Samsom, who started his job in January, said the tax department has always struggled to get refunds out quickly. He said this year was different because it’s the first year that the department started using a new computer system.

Additionally, Samsom said, the tax department is taking steps that slow down refunds in order to prevent fraud. Without the protections in place, he estimates that the state could send out $8 million a year in refunds that were requested fraudulently.

He said there are also taxpayers who made mistakes when filing their returns, which delayed the process, and that the tax department also could have made mistakes when processing the tax returns.

“I’m very sensitive to the folks that I’ve heard from directly and indirectly,” Samsom said. “I consider it a priority of the department to find the best balance possible between fraud prevention and accuracy.”

Samsom said the slower refunding process may not be related to staffing levels and that he is not ready to request additional staffing to process refunds.

The commissioner asked people to call the tax department if they filed a tax return on time — by April 18 — but have not yet received their refund. He said he has spoken with filers personally to help expedite their refund.

The number is 802-828-2505.

Photo by Erin Mansfield, VTDigger
Tax Commissioner Kaj Samsom