Report: Late tax refunds for paper-filers linked to state contract

Posted at: 07/01/2013 4:52 PM
Updated at: 07/01/2013 5:41 PM

More people coming forward after an I-Team10 story into people who filed their state taxes on paper but are still waiting for their state tax refunds. Tonight the I-Team has gotten a little closer to the source of the problem.

If you filed your taxes electronically -- you probably have your refund. This problem is almost exclusively for those who filed on paper.
Today we were able to get closer to the real problem here. The state Department of Taxation and Finance says it's not talking about the problem of late refunds publicly. But the I-Team was directed to a story in the Albany Times Union about the very same problem.

It says the state contracted the work of processing paper filing to an organization called New York State Industries for the Disabled.

Click here for a link to NYSID

NYSID's website says the organization turns "business opportunities into jobs for New Yorkers with disabilities."

The newspaper report quotes state officials as saying that's where the problem is. The Times Union reports the contract is worth $16 million. But you can add to that because - by law - late refunds, those sent out after May 15th, earn 2% interest everyday. As of this posting we're 32 business days passed May 15th. That interest penalty is subsidized by taxpayers.

So that means people like Donna MacKenzie is earning interest on her refund. (But she may be contributing to that interest when she pays sales tax.) She contacted us after she watched our initial story on this problem Friday. Just like the dozens of other people who emailed and called us -- Donna filed her taxes on paper and on time but still has no refund.

The state is prohibited from talking to us about specific cases, so we got Donna to call the state tax office to find out what's going on.

"You said you're just getting the April filers stuff processed right now?" Donna asked the tax office representative. "Wow."

Donna was told to wait another two to four weeks.

"I sure don't feel good for myself but I feel worse for other people who need that refund check and count on it a lot more than what I do," she said.

Who can you call?

If you don't have your refund and want to check on its status you can called the automated line: (518) 457-5149.

The number where you can eventually reach a customer service rep is: (518) 457-5181.

The state says 95 percent of all tax refunds have been sent out and 90 percent of all taxpayers file electronically.