State buried in tax refund applications

THE ASSOCIATED PRESS

The Louisiana Department of Revenue has increased its staff to process an onslaught of sales tax refund applications n many potentially fraudulent n from victims of hurricanes Katrina and Rita.

Department Secretary Cynthia Bridges told the Louisiana CPA Society tax conference Friday that the work load has been exacerbated by suspicious claims.

“Unfortunately those with legitimate claims are not having their claims processed in a timely manner,” she said.

The program dates back to the 1970s, but generally did not generate much in the way of claims until 2005, Bridge said. The refund program allows consumers to recover the sales taxes they paid on personal items lost in federally declared disasters.

After Katrina and Rita, the department that handles the refunds had increased its number of workers from two to 20. Another 20 temporary workers were hired after the number of applications hit 144,000.

With the increased staff, Bridges said she expects the claims work to be completed within seven months.

Bridges estimated that one out of two claims was suspicious either because the claim is too large for the person’s reported income or because the list of items claimed is a duplication of other refund claims already received.

Among the most outrageous claims came from filers who lived in Mississippi, but tried to get their sales tax refunded by Louisiana, she said. In addition, some tax refund claims exceeded the amount of income the person has reported to the state over many years.