Saturday, November 23, 2013
By Marc Kovac
COLUMBUS
More businesses will receive refunds for tax overpayments, as the Ohio Department of Taxation works to reverse a former office policy called into question by state investigators this week.
The expanded refund effort comes about a year after Tax Commissioner Joe Testa and Gov. John Kasich launched an initial round of refunds after determining the department purposely had not informed taxpayers of money they were owed.
“It just made my blood boil when, not long after taking office, we learned that the tax department was keeping a secret from businesses that they had overpaid their taxes and was then playing games about returning their money,” Testa said in a released statement. “The governor quickly charged me with putting an end to this, and now we have.”
Unlike personal income- tax forms, which include a space for residents to request a refund, business filings do not include prompts to return overpayments.
The state won’t issue a business refund unless one is sought. And for years, the tax department made no effort to contact businesses about potential refunds, Testa said.
After four years, such payments are transferred to the state’s general-revenue fund to pay for other expenses, rather than being returned to taxpayers.
Late last year, after discovering the policy, Testa and Kasich announced that about 3,500 businesses would receive $13 million-plus in refunds, with continuing efforts to identify other businesses owed money.
This week, the state inspector general’s office identified nearly $300 million in overpayments as part of a review prompted by a separate investigation of employee theft.
The total includes more than $30 million in refunds that were properly requested by businesses but not returned by the state.
“For years, the Ohio Department of Taxation has ignored the fact that they are holding taxpayer money that doesn’t belong to the state,” Inspector General Randall Meyer said in a released statement. “The people who are paying to operate this government deserve to be told the truth about their accounts.”
The inspector general recommended that the taxation department notify taxpayers of refunds and implement a new policy to ensure future overpayments are promptly reported.
Testa said the tax department already has started contacting businesses owed about $30 million in refunds, with additional efforts planned to identify other overpayments.
Businesses that think they may be owed a refund can contact the tax department at 800-304-3211 or online at www.tax.ohio.gov.