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State watchdog finds millions in tax refunds sitting in state accounts

State watchdog finds millions in tax refunds sitting in state accounts

COLUMBUS, Ohio (WTVN) - A report by the state watchdog says Ohio has failed to return more than $30 million in business tax refunds to companies that properly requested the money.

The investigation by the Ohio Inspector General found that $34 million in requested refunds dating back several years were placed on pending status and therefore not paid out. Investigators had initially been looking into theft allegations against a Dept. of Taxation employee.

"It's hard to know if this would have ever even come out had we not come across the $5,000 internal theft," said Meyer.

The report released Thursday said the refunds that were given back didn't include interest, which violates Ohio tax law. Some of the overpayments date to at least 1999.

The Inspector General also said the practice of the Department of Taxation was not to inform taxpayers of any overpayments.

Meyer says something that really bothered him during the investigation was conversations with Dept. of Taxation employees where they kept describing the money as the state's.

"That's something that needs to be fixed at Taxation is the overall philosophy that this is Ohio taxpayer's money, it's not the state of Ohio's money," he said.

Tax Commissioner Joe Testa says he was "ticked" when he was informed of what had been happening.

"I was absolutely shocked that this office would treat business taxpayers the way that they had been treated," he said.

Testa says his office has already made changes to remedy the situation and prevent it from happening again. Right now they're working on getting the refunds issued. Testa has also changed the policy that if businesses don't ask for their refund they don't get it. He says the agency's website now tells businesses if there's an overage when they file online.

"Legally the taxpayer has to request a refund and legally the tax commissioner has no responsibility to notify you of this. Does that stink or what?," he said.

Last year, as the investigation was under way, the agency said it would begin alerting businesses when they've unknowingly overpaid taxes and help them reclaim their money.

(Photo courtesy Getty Images)

 

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