New York
State website headline:
“May 31,
2017 Albany, NY — Governor Cuomo Announces Tax Department Stopped More Than
330,000 Suspicious Refund Claims”
In 2018 the
New York State Department of Taxation and Finance refused to send my mother her
2017 income tax refund, and instead demanded “additional information.” The
questionable circumstances surrounding their refusal may be symptomatic of a
larger issue affecting New York’s vulnerable elderly taxpayers.
At the age
of 94, my mother, receiving a municipal pension plan and Social Security, and
taking a standard deduction, seems an unlikely candidate for a tax refund
scammer. Her Federal and New York State tax forms had reported incomes from these
same sources for the last ten years, and TurboTax’s “Audit Risk Meter” had
remained at the very bottom of the risk scale all that time.
Nevertheless,
New York State found her tax
return “suspicious,” so I filled out the supplied form and sent it, along with the
required copies of additional information, by Certified Mail. The refund check
arrived in June of that year.
In 2019 the
New York State Department of Taxation and Finance refused to send my mother her
2018 income tax refund, and again demanded “additional information,” even
though all the income was from the same sources and virtually identical to the
return from year before that had been subsequently approved.
I filled out
the new form and sent it, along with the required copies of additional
information, by Certified Mail.
In a space
provided on the form, I requested the reason for their refusal and the need for
the additional forms and paperwork.
The refund
check arrived in June of this year. No explanation for their repeated refusals
has been received.
When I first
told her that we needed to send another form and more tax documents to Albany
to try to get her a refund, my mother responded: “Don’t bother.”
Could the
explanation be simply that by creating difficulties and barriers to the
claiming of legitimate tax refunds, some taxpayers would be unwilling or unable
to collect them?
And if their
programming refused my mother a refund on the basis of her return, wouldn’t
many other elderly taxpayers on fixed incomes be selected for the same
treatment?
As mentioned
in the introduction to this series:
In each
blog, I will focus on an actual incident or issue that raises questions about
the conduct of those who have been entrusted with the welfare of the public at
large.
The
questions and facts of the case will be included in a letter sent to the
persons responsible for regulatory oversight, as well as to our elected
representatives. The body of the letter will be disclosed in each blog, and the
results of these letters and the names of recipients will be posted as updates.
At the end
of the series, I will summarize the findings as to whether the response of
Tompkins County public officials has been consistent with their duty to protect
the public at large.
Below is the
body of the letter:
I am writing
to request that you look into the New York State Department of Taxation and
Finance’s policy for stopping “Suspicious Refund Claims.”
I believe
that the tax refund claims of New York’s vulnerable elderly are being stopped
without proper reason by the New York State Department of Taxation and Finance,
and in a manner that unfairly persuades the elderly to relinquish these claims
to the benefit of said taxing authority.
New York State website headline:
“May 31,
2017 Albany, NY — Governor Cuomo Announces Tax Department Stopped More Than
330,000 Suspicious Refund Claims”
“The
system’s predictive analytics and rules sift billions of data points to
determine when to process a refund request or return and when it requires
greater scrutiny.”
New York State
Acting Commissioner of Taxation and Finance Nonie Manion said, “Our
award-winning analytics system allows us to review each of the 10 million
personal income tax returns as we receive them to stop suspicious returns and
efficiently process the rest.”
Since the programming
used by Taxation and Finance will select all similar returns and stop the
refunds, the following example will be sufficient to extrapolate a serious
problem in their methodology.
In 2018 the
New York State Department of Taxation and Finance refused to send my mother her
2017 income tax refund, and instead demanded “additional information.”
At the age
of 94, my mother, receiving a municipal pension plan and Social Security, and
taking a standard deduction, seems an unlikely candidate for a tax refund
scammer. Her Federal and New York State tax forms had reported incomes from
these same sources for the last ten years, and TurboTax’s “Audit Risk Meter”
had remained at the very bottom of the risk scale all that time.
Nevertheless,
New York State found her tax return “suspicious,” so I filled out the supplied
form and sent it, along with the required copies of additional information, by
Certified Mail. The refund check arrived in June of that year.
In 2019 the
New York State Department of Taxation and Finance refused to send my mother her
2018 income tax refund, and again demanded “additional information,” even
though all the income was from the same sources and virtually identical to the return
from year before that had been subsequently approved.
In a space
provided on the form, I requested the reason for their refusal and the need for
the additional forms and paperwork.
The refund
check arrived in June of this year. No explanation for their repeated refusals
has been received.
When I first
told her that we needed to send another form and more tax documents to Albany
to try to get her a refund, my mother responded: “Don’t bother.”
Could the
explanation be simply that by creating difficulties and barriers to the
claiming of legitimate tax refunds, some taxpayers would be unwilling or unable
to collect them?
And if their
programming refused my mother a refund on the basis of her return, wouldn’t
many other elderly taxpayers on fixed incomes be selected for the same
treatment?
In addition,
the Department of Taxation and Finance only allows two avenues for questioning
its decision: Visit their website or call them at 518-485-6808.
Visiting their
website is not a real option for many elderly, who have no experience with
computers or access to the internet. The phone number given is a toll number
and would require a daytime long distance call for the majority of elderly
using a land-line telephone. When I called this number on a land-line, I was
informed there was an estimated wait time of more than 20 minutes before I
could even speak with anyone — I hung up immediately and was charged $1.26.
With their imposition
of extra forms and paperwork, and the difficulty and expense in questioning or
clarifying the Department of Taxation and Finance’s decisions, it’s a policy that
would scare off many fixed income elderly residents who are already living
lives of complication and apprehension.
How many
legitimate tax refunds have been wrongfully retained by New York State through the
creation of barriers that are difficult for the elderly to overcome? It doesn’t
require an “award-winning analytics system” to predict — quite a few.
This abuse
will continue as long as it remains unchecked.
Please let
me know what you are doing to correct this situation.
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