Fraud, security breaches delay state tax refunds

State tax officials say that the processing of income tax returns are taking longer than normal due to a variety of outside forces, including increased attempts to cheat the system.

Department of Revenue Commissioner Lynne Riley said the department has already blocked $17 million from fraudulent returns in 2016, compared to $19 million in all of 2015.

“The 2016 tax filing and processing period has been complicated for the Department of Revenue for a variety of factors,” Riley said in a statement. “Whether it be one of the many data breaches that have been reported in the last year, or a spoofing or phishing scam, every incident requires us to modify our systems to protect the affected taxpayers.”

The agency encouraged taxpayers to register with the department’s tax center website to monitor the status of their refunds.

Revenue officials said in early May that only about 1 percent of Georgians, or about 100,000 taxpayers, were still waiting for their refunds. The department slowed refunds in February when it implemented its new fraud management system.

Data breaches at the Internal Revenue Service have also contributed, she said, as have employers not filing W-2s for their employees.

“The department has no recourse if this information is not timely remitted,” Riley said. “The lack of this corroborating data may lead to processing delays.”

The agency earlier this year implemented more sophisticated systems that automatically scan returns for potential fraud or missing information. But the system must be re-calibrated for each new threat. The agency, Riley said, “is taking extra precautions to verify that funds are released to the rightful recipient.”