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April 14, 2010

DiNapoli: $12 Million In Questionable Tax Refunds Stopped

The State Comptroller’s Office has so far stopped $12 million in questionable personal tax refunds from being paid in 2010, New York State Comptroller Thomas P. DiNapoli said today. His office has audited and paid 3.5 million tax refunds totaling $2.7 billion. Another 800,000 in refunds totaling $566 million is scheduled for payment in the coming days.

DiNapoli’s office is responsible for auditing all bills for the state prior to payment, including personal income tax refunds.

“Tax cheats use every game in the book. They falsely claim children they don’t have, use fake social security numbers or just plain lie,” DiNapoli said. “Whatever the scam, we’re working to sort through the honest mistakes and find the fraud to make sure only legitimate tax refunds get paid.”

The majority of questionable refunds were filed by taxpayers who claim credits for ineligible child care or credits allowed only for low-income households. In many instances, the filers’ income was understated, the number of dependents was inflated or the daycare providers had invalid employee identification numbers.

Questionable personal income tax refunds stopped include:

Reason for Stopping Tax Refund

Number of Refunds

Dollar Value of Refund

Taxpayers claiming ineligible refundable credits (e.g. fake or inflated number of dependents, fictitious day care centers, or understating income)



Tax Preparers submitting returns claiming ineligible refundable credits



Taxpayers failed to claim correct New York State Income



Taxpayers had questionable itemized deductions



Taxpayers failed to claim correct New York City Income



Taxpayers had questionable social security numbers



Various other reasons



Total questionable refunds not paid




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