Taxpayers find refunds aren't in the mail

May 28, 1994|By Marina Sarris | Marina Sarris,Sun Staff Writer

Carole A. Jackson of Baltimore has been waiting 12 weeks for the state to cough up her income tax refund -- even though she's submitted her return twice.

It's been eight weeks for accountant John Mosner of Pikesville.

Harriet Garner of Essex finally got her refund yesterday -- 16 weeks after she filed for it.

She was not alone. About a half million of her fellow Marylanders have waited longer than usual for their refunds this year due to glitches with a new high-tech tax processing system.

That is double the number of late refunds as last year, said Marvin Bond, a spokesman for Maryland's tax man, Comptroller Louis L. Goldstein.

Many early-bird filers waited longer than the customary two to four weeks for a refund, while procrastinators -- the ones who lined up at post offices April 15 -- may not be seeing their check in the usual five to seven weeks.

How much longer are people waiting? Mr. Bond said he can't say because no one wants to stop the new system to find out -- at least not until it finishes its work early next month.

The problem is the advanced $1 million system the state installed last year. Using "imaging" technology, machines scan tax returns and feed the information into computers for processing.

The system, the first of its kind in the nation, had a few kinks that needed to be ironed out this year, Mr. Goldstein said.

"Any system you have that's new is bound to have a few problems, and we've got them solved," he said. "Next year our system should work perfect."

That doesn't offer much comfort to people still waiting for refunds.

"This is unreal," said Ms. Jackson of her three-month wait so far.

She made several calls to the comptroller's department, she said, but no one would tell her when she would get her money or why it was taking so long. "I think as a taxpayer I should be told something," she said.

Ms. Jackson, who works as a claims examiner at the Social Security Administration, hopes to have her refund in time for her vacation next month.

Ms. Garner, a clerk, said she received a notice Thursday indicating her refund was late because she had made a mistake on the return.

She was glad to have the information but shocked it took the state four months to inform her.

"If I owed [the state] money for four months, I would have to pay taxes on it and I'd have to pay interest on it."

The state, she correctly pointed out, doesn't have to do either when it's the one that owes the money.

The system has been touted as a model of efficiency by Mr. Goldstein. In news releases hailing it as "revolutionary," the comptroller said it will save state taxpayers $16.4 million over the next 10 years, largely by having computers do work that had been performed by people. In fact, the Internal Revenue Service signed a contract with IBM this year to adapt Maryland's imaging technology for federal tax forms.

Fifteen desktop machines scan each return using handwriting-recognition technology. They feed a picture, or image, of the return into computers for processing. The state handles about 2.25 million returns from individuals a year, more than half of them refunds.

The system, however, had difficulty distinguishing dollar signs, commas and decimal points.

New addresses and name changes wreaked even more havoc. Due to a programming problem, the system was spitting out some tax returns because it was reading updated addresses as "errors," Mr. Bond said. Some 28 percent of the errors that delayed refunds were address-related.

In Mr. Mosner's case, the computer transposed digits in his Social Security number, delaying the refund. Mr. Bond investigated his case after learning about it from a reporter.

Mr. Mosner said he spoke to Mr. Bond Thursday and learned that his check was in mail.

"He apologized," Mr. Mosner said. (Because of privacy laws, Mr. Bond could not discuss the case directly with a reporter. He did say officials could not determine the cause of the problem.)

Mr. Bond also looked into Ms. Jackson's case.

"He said they looked high and low, and they can't find the original or the duplicate," she said. Mr. Bond told her to fax another copy to Annapolis and her check would be issued speedily.

Most taxpayers due refunds have received them by now. In fact, as of last Tuesday, the state had issued 1,240,000 refunds, almost 26,000 more than it had as of the same day last year, Mr. Bond said. Sixty percent to 70 percent of those refunds arrived on time, he said.

Mr. Bond said some unexpected problems created an early backlog, but officials quickly resolved some of them. Some taxpayers didn't round to the nearest dollar, despite instructions to do so. The instructions, however, didn't tell taxpayers to avoid commas and red ink, which also caused problems.

To handle the backlog, the comptroller hired more temporary employees, bringing the total cost from $750,000 to $1.65 million. He paid the bill with money saved when he abolished 52 vacant jobs last fall due to the new technology.

Democrat James B. Moorhead, a Rockville lawyer running for Mr. Goldstein's job, wants to make the problems a campaign issue.

"I don't think it makes sense to be the pioneer for a new computer system, because what's happening here shows that you end up being the guinea pig. The danger of being first is your taxpayers suffer while the kinks are being worked out of the system," the candidate said.

Mr. Goldstein shot back, calling himself an innovator who has sought to improve services throughout his 36 years as the chief tax collector.

"When you're on the outside doing nothing and an unemployed lawyer, you can say anything," Mr. Goldstein said of his opponent, who left his job at a law firm to campaign full-time.

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