Purpose
The objective of our examination was to determine whether personal income tax refunds approved by the Department of Taxation and Finance (Department) for payment were appropriate and processed in accordance with applicable New York State tax laws and regulations. We examined refunds processed during the calendar year January 1, 2016 through December 31, 2016.
Background
During the period of our examination, the Department processed almost 7.6 million refunds totaling over $9.6 billion. From this population, we returned 12,335 refunds totaling almost $43.9 million to the Department for follow up evaluation and appropriate action.
Key Findings
We identified and returned to the Department 12,335 questionable refunds totaling about $43.9 million, as summarized in the following table:
| Refunds | ||
| Reason for Stopping Refunds | Number | Dollars |
| Taxpayer claimed ineligible refundable credits (e.g., fake or inflated number of dependents or understated income) | 9,875 | $ 32,144,145 |
| Tax preparer submitted returns with refundable credits based on incorrect information | 1,468 | 4,803,844 |
| Taxpayer failed to claim correct income | 604 | 4,389,218 |
| Other | 235 | 2,154,774 |
| Taxpayer claimed incorrect wages and withholding tax | 98 | 180,448 |
| Taxpayer had questionable itemized deductions | 55 | 267,850 |
| Total Refunds Stopped | 12,335 | $ 43,940,279 |
Holly Reilly
Division of Contracts and Expenditures
Holly Reilly, Director of State Expenditures
Phone: (518) 474-4868; Email: [email protected]
Address: Office of the State Comptroller; Division of Contracts and Expenditures; 110 State Street, 10th Floor; Albany, NY 12236