DRS error could mean unexpected check for taxpayers - WFSB 3 Connecticut

I-TEAM INVESTIGATION

DRS error could mean unexpected check for taxpayers

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HARTFORD, CT (WFSB) -

When a woman's brother suffered a brain injury, she said she took over his finances, including his taxes.

Lee Etheridge said when her brother received a bill from the state's tax department a few years ago that claimed he owed money, she paid it.

"I called them, and they said we were all set at a zero balance," Etheridge said. "That was in the spring of 2011 for the tax year 2007."

However, she said something funny happened this year. She received two checks in the mail. The State Department of Revenue Services sent the money back.

"They were for the identical amount that they had taken in 2011," she said.

She did not have long to think about what it meant before more mail arrived from the state.

"Two days or three days later, I got a letter from the state saying he owed for 2007, now $1,400 at this point with interest and penalty, and that he could do a tax amnesty program," said Ethridge. "But I had just gotten the two checks back for the same year."

She called the state and was told that a review of some files showed taxpayers who owed money had been charged without getting notice of their right to appeal.

Commissioner of Revenue Services Kevin Sullivan heard about it from his staff.

"It came to my attention internally that we had not done exactly what we were supposed to do in terms of notice you're supposed to give the taxpayers," Sullivan said.

So the department sent the money back. Etheridge, however, said she was surprised that a new bill came days later with due interest dating back to 2007. For at least two of those years, the state had her brother's money, but seemed to still charge interest on it.

"Paid in full, the interest was $293," Etheridge said. "The 2013 bill, the interest went up to $546 on money they had in their possession. If someone could just explain that to me, I'd be fine, but I don't think they can."

When she couldn't get answers, she called the I-Team.

"We appreciate it," Sullivan said. "I'm glad you brought it to our attention."

Sullivan said the problem was that the tax system was automated. When the DRS inputted to the computer that the money went back out, the computer did not know why.

"The system said, ‘Taxpayer still owed the money,'" said Sullivan. "The fact that we collected it briefly, held it for a while and then gave it back, well, once we gave it back, the system says, 'You still owe.' The system does not make a correction in the interest, so literally we will do this manually."

The state was working through that manual review. Officials said they expected several hundred taxpayers may be impacted and that each would be notified. Some may get money back.

Complicating matters was that the notices went out during the state's Tax Amnesty Program, so some who received their money back could use the program and despite the erroneous interest, could still end up paying less.

That's what officials said happened to Etheridge.

Her brother was hit with the extra interest but ended up saving a few bucks overall by using tax amnesty. Etheridge, however, was worried others may not watch their bills as close as she watches over her brother.

"I don't want people to get taken advantage of because they didn't read a bill correctly or they didn't see certain data on the bill," she said.

Sullivan said he worked hard to change the perception that DRS was an agency to fear. He said when mistakes were made, he was happy to fix them.

"She brought it to us; we brought it to you," Sullivan said. "It's going to get fixed.

For a handful of Connecticut taxpayers, the I-Team's work could mean a rare and unexpected check from the tax man.

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