RALEIGH A policy change may mean that thousands of North Carolinians who overpay their taxes won't get refunds, the Raleigh News & Observer reported yesterday.
The change comes in how the state's Revenue Department decides an overpayment has been discovered. In previous years, a computer system would flag returns on which filers had mistakenly paid too much. After the return was checked by a department employee, the refund was made. The computer typically flags returns quickly after they are filed.
Now the department says overpayments are not "discovered" until an employee looks at the flagged return. If that review happens after the three-year window for refunds, the taxpayer could be out of luck.
The newspaper based its report on the tax agency's e-mail that was released after an appeal to the state attorney general's office. The agency would not comment on the issue beyond the release of e-mails.
"It is the governor's strong feeling that if we as a state have the opportunity to process these accounts in accordance with the law and pay people back the money that they are owed, that we should be doing it if we can," said Chrissy Pearson, a spokeswoman for Gov. Bev Perdue. "Unfortunately, the if we can' is the big question here."
Pearson said she was told the Revenue Department thinks it would take $1 million to hire new staff to get through the backlog of 230,000 tax returns, some dating as far back as 1994, awaiting a review.
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