Government red tape may be blocking access to refund cards
BATON ROUGE - Taxpayers are missing out on extra cash and now they have to go back to the state to recoup it.
Millions of dollars in 2012 state income tax refunds never made it to taxpayers because the money was dispensed on special refund, gift card-like cards.
The state created the my refund card system to save money instead of issuing checks. Taxpayers were able to get a refund with a bank issued card or by direct deposit.
But, some cards never went to the right person. Others got their cards but the cards were not activated.
In all, 30,443 people who received a card did not claim their refund. That is more than double the amount of unused refunds from the previous year.
"There were several days where we spent four or five hours a day just handling state refund issues because people were trying to find out where their state refund is and why they hadn't received it," Jackson Hewitt Tax manager Steve Everly said.
Everly believes some cards never went out, were lost, stolen or even tossed aside unknowingly.
"What happened was the state said we are going to send the cards out, but they didn't even tell anybody," he said. "They didn't even know what bank the card was going to be drawn on. So people were getting this solicitation from the bank. Well I don't have any card with this bank and they threw the card away. So that added on to a whole lot of problems early on with the card."
The cards not activated expired in October, just as issued checks did in years passed.
The amount of money on the cards that were never used totaled $3.4 million. The money went to the Treasury Department's unclaimed property.
"We implemented an aggressive and comprehensive public education campaign about the card. It included a ten day state-wide, paid media ad buy in all seven of the state's media markets," Department of Revenue's Byron Henderson said.
But Everly still blames the issue on the lack of awareness.
"A lot of people out there who didn't get a refund last year and don't know why," Everly said.
"I know they don't want it sitting around for a certain period of time. The most important thing we should look at is to see if it should be only a one year extension or not have it expire at all," State Representative Pat Smith said.
By law, any refunds not cashed in or used must be sent to the Treasury Department after a year, Department of Revenue's director Tim Barfield said.
"That money is sitting there and they will have to get enough information to recoup their dollars from the Treasury Department," Smith said.
Unclaimed property can be collected by visiting the Treasury Department's website. If a person is entitled, they must fill out a form and prove who you are to collect it.
"They were notified the money was going to unclaimed property, and they are free to claim it from there," Henderson said. "That (amount sent to unclaimed properties) represents only one point five percent of the 226 million dollars that we distributed on the my refund card. No matter how you measure it, the program was well received by the target audience for the my refund card."
Tax filers can again receive a refund check if they choose.
The easiest way to skip potential issues is to get a bank account, file electronically and use direct deposit, Henderson said.