Government

Iowa tax refund late? You're not alone

State officials cite fraud crackdown, not lack of money

Composite of person with calculator and tax forms
Composite of person with calculator and tax forms

Eastern Iowans are getting crabby about delayed state income tax refunds — a problem three years in a row — as lawmakers question whether Iowa has enough in its coffers to pay the returns.

Iowa Revenue Department officials say the waits are due to security protocols designed to prevent the kind of tax fraud seen in 2015.

“That’s just another of their excuses,” said Bill Lint, 69, of Cedar Rapids. “Excuses are like garbage cans. Everyone’s got one and they all stink.”

Lint’s personal income tax refund took 39 days, he said. Part of the problem was that his tax preparer didn’t specify he wanted a direct deposit, but Lint still thinks it took too long.

Refunds at the end of February were running $42 million behind the same time the previous year. And even then, refunds were 40 percent behind the 2016 level, the nonpartisan Legislative Services Agency noted in its monthly state revenue memo.

“Total refunds issued at this point in the fiscal year total are very low, even by last year’s standards of slow refunds being issued,” according to the agency.

All 41 House Democrats sent a letter Wednesday to Revenue Director Courtney Kay-Decker, seeking answers to nine questions, including: What is the average delay of refund checks? What’s causing the problem? Does the state have adequate cash reserves to pay refunds? and What is Gov. Kim Reynolds doing to address the issue?

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“We’ve been contacted by many constituents who are frustrated by the long delay getting their state income tax refund this year,” said Rep. Chris Hall, D-Sioux City, ranking member of the House Appropriations Committee. “Iowans deserve to know why the delays have increased even more this year and how long they will have to wait to get their money back.”

Lawmaker letter

Iowa Dem tax letter 2018 by Source Media Group News on Scribd

Bess Naujoks, 80, of Cedar Rapids, said her state refund took six weeks, compared with just six days for her federal tax refund.

“That money is used by the state all year and then I wait six weeks to get a refund,” she said.

However, this year was an improvement from 2017, when Naujoks’ refund was not deposited until eight weeks after she filed.

Naujoks and Lint said they are concerned Iowa may not have enough revenue on hand because of tax cuts and incentives given to businesses.

A Des Moines Register investigation last year showed Iowa didn’t have enough cash available to pay refunds at the same level of previous years.

“The state can give $12 billion away to businesses, but can’t pay me my $1,000 tax return?” Lint asked.

In response to questions from legislators and the news media, Revenue officials issued a statement saying the agency “is not delaying tax refunds.”

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“We are working to keep taxpayer information safe and provide Iowans with the correct refund,” according to the department.

“The process we follow includes a combination of manual and automated reviews on returns to ensure refunds go to the right taxpayer in the correct amount — and stay out of the hands of criminals. The processes used to identify fraudulent or erroneous refunds change every year.

“By using these processes, the department identified $44 million in fraudulent or erroneous refund claims in 2017. This included over $17 million in claims stopped by our fraud review and $27 million in mistakes found on returns,” according to the statement.

l Comments: (319) 339-3157; erin.jordan@thegazette.com

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