Contractor issues delaying many state tax refunds

PHOTOGRAPHER: David Lombardo

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Guy Spiers normally gets his state income tax refund about two months after he files his return.

This year he has waited almost six months to get his $2,600 refund and it still hasn’t come.

The Niskayuna resident is not the only one still waiting for refunds, which are being delayed for those who filed a paper return because of problems with a new contractor that processes the returns, state Department of Taxation and Finance spokesman Geoffrey Gloak said via email Wednesday.

The delays have prompted the tax department to redirect staff to assist in the processing of tax returns, he said. The $16 million contract to process state tax returns belongs to New York State Industries for the Disabled, which is using SourceHov to do the work.

According to the state comptroller’s website, the contract to process returns ends in 2015 and the state has spent $234,000 on the contract to date. SourceHov, under the name SourceCorp, currently has more than $85 million in state contracts.

Gloak said staff overtime and interest payments on refunds, which have been accruing since June 1, is provided for in the contract and will not cost the taxpayers. He added that despite the priority being placed on refund delivery, revenue collections are not being reduced.

Dianne Chagnon Burns of Scotia, who is owed a $1,163 state income tax refund, feels like when it comes to refunds, the state should have to play by the same rules as filers.

“I have to pay my returns on time or I get penalized … but they don’t have to,” she said.

Currently out of work and about to have a total knee replacement, Chagnon Burns said, “[The refund] would help run my household … I certainly could use the money now.”

The delayed refund caused anxiety for Spiers, who normally files his return in the middle of February and gets his refund by April 15, when taxes are due. “When I didn’t get that refund, I started checking the [tax department] website. … All it told me was, ‘We have no record of your returns,’ ” he said. “So I panicked and my wife and I made another copy of our return and mailed it in with a note attached.”

It wasn’t until recently that he heard from a tax department employee who told him about the delays with paper returns. “They didn’t give me any details, just said they’re having trouble with paper filings,” Spiers recounted.

When The Gazette asked last week about the rate of state income tax refunds, Gloak said that 95 percent of refunds had been sent out and that there were some “outlying returns as a result of errors, additional reviews, etc.” He made no mention of delays caused by problems processing paper returns.

Spiers said: “We ought to be able to know a little more about what is going on. It’s a little frustrating that I can’t get any information or assurances when I’m going to get my money.”

The tax department is estimating that outstanding refunds will be completely resolved by early August.

Based on her experience, Chagnon Burns is not optimistic about getting her money, saying, “I’m at the point where I don’t ever see my return coming.”

Paper tax returns have become less and less common with the growing popularity and relative ease of digital filing. Almost 90 percent of state filers submitted a digital return, which is a slight increase from last year and about 30 percentage points higher than five years ago, according to Gloak.

He added that the state is working closely with the contractor to resolve any technical issues before the next tax season.

For information about your refund, call 457-5181 to talk with a tax department representative.