New tax management system finding more errors, but sparks late returns

SOUTH MISSISSIPPI (WLOX) - Of the 1.1 million in Mississippi tax returns, 99 percent have been sent out to taxpayers for the 2012 tax filing season, however, there have been reports of returns coming in later than usual.

The Mississippi Department of Revenue Government Affairs and Communications Director Kathy Waterbury said part of that reason is because of their new tax management system.

"You cannot physical look at it all so the system does all of these checks for us. That's why it takes a person to look at when an error is found," she added.

This new system is weeding out errors tremendously well. So well, Waterbury said, they are absolutely inundated with filing errors that the new system is catching. When an error is found an actual employee must look over that error.

Waterbury said there is too much work and too few people to do it. She said there are only 18 people on staff to look over the errors that are flagged by the new system.

"We are 10 percent less in staffing than what we were in the year 2000. And our work load has increased by more than 25 percent," Waterbury said. "We made a conscious decision to not send out bad refunds. We know that if you send out a bad refund, in most cases, it will never be collected back."

She said the system has stopped more than $30 million in fraud, but the department of revenue isn't finished yet.

"There are still a lot of returns they are looking at that will result in the assessment of tax which means the filer will owe the IRS money," Waterbury said. "The system is finding a number of problems in the returns."

Some of those problems include improperly filled out returns.

"Your spa trip is not deductible. Having color put in your hair is not deductible," she said.

Other problems comprise of someone on a computer in the other side of the world creating false wage information and false name looking for a refund, or there could be a return filed from a refund mill.

Some of the common errors Waterbury said her department sees:

  • More than 60,000 people didn't attach a W-2 schedule.
  • 190,371 return errors,
  • 20,021 payment T errors,
  • 56,671 other account errors like something changing in the tax payer's personal account

"I performed 21,641 extended reviews, which means that there was more that we needed to go back in history and look a little further than this year in filer's tax history," she said. "For the most part a lot of this is stuff may have resulted in identity theft."

And for the people who filed an extension in April the Department of Revenue expects to have another 150,000 to 200,000 returns coming on October 15, which is the due date.

If someone receives there regularly filed tax return back late after August 15, Waterbury said, they'll be paid interest for the delay.

Waterbury said currently, more people are being trained to work for the Mississippi Department of Revenue.

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