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, 2017 through December 31, 2017.
Background
During the period of our examination, the Department processed almost 7.7 million refunds totaling over $9.5 billion. From this population, we returned 10,414 refunds totaling almost $36.7 million to the Department for follow up evaluation and appropriate action.
Key Findings
| Reason for Stopping Refunds | Number | |
| Taxpayer claimed refundable credits based on incorrect information, such as inaccurate number of dependents or understated income | 7,992 | $25,039,648 |
| Tax preparer submitted returns with refundable credits based on incorrect and/or false information | 928 | 2,796,792 |
| Taxpayer failed to report correct income | 722 | 4,018,168 |
| Taxpayer used a questionable social security number | 424 | 1,059,098 |
| Taxpayer had questionable itemized deductions | 117 | 328,619 |
| Taxpayer reported incorrect wages and withholding | 99 | 238,128 |
| Other | 132 | 3,250,777 |
| Total Refunds Stopped | 10,414 | $36,731,230 |
Key Recommendations
Continue working with our Office to identify and implement opportunities to help detect and prevent erroneous refunds.
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