With tax season set to open today, a second state has tapped the brakes on tax refunds.
North Dakota Tax Commissioner Ryan Rauschenberger has announced that the state will be instituting “additional preventative measures” to address concerns about tax fraud and, as a result, taxpayers should expect slower refund processing times. Rauschenberger noted that his office “has been gearing up for the upcoming tax season with a considerable focus on combating tax fraud.
How can taxpayers beat the odds? Rauschenberger says, “We encourage taxpayers to file as early as possible to help prevent fraud.” Filing electronically is the fastest and most secure way to file, according to Rauschenberger. But bring along some ID: North Dakota, along with many state tax departments, is requesting driver’s license or state-issued identification card information for electronically filed tax returns. Requiring identification is one more way that the state is trying to combat identity theft-related tax fraud.
Even with e-file, taxpayers should be prepared to wait. And Rauschenberger encourages a good dose of understanding. “We ask that taxpayers be patient when waiting for their refunds,” Rauschenberger says. “A slightly longer processing time is actually a good thing. We are taking the time to prevent North Dakota tax dollars from getting into the hands of fraudsters.”
In the last filing season, Rauschenberger’s office stopped more than 900 returns claiming $1.3 million in fraudulent refunds. He noted that “[t]he 2015 tax season saw a sizable increase in the amount of attempted tax fraud, and we are expecting 2016 to follow suit.”
North Dakota isn’t alone in concerns over tax fraud: as of May 2, 2015, the Internal Revenue Service (IRS) reported that it had identified 163,087 tax returns with more than $908.3 million claimed in fraudulent refunds and stopped the issuance of approximately $787 million (86.6 percent) of fraudulent refunds (report downloads as a pdf). Earlier this month, Illinois announced that it would also be delaying tax refunds, citing concerns about identity theft-related tax fraud.
