Fraud is on the rise along with Vermont tax filings, according to a release by the Tax Department.
The trend is not unique to Vermont, said Maribeth Spellman, director of policy, outreach and legislative affairs for the department. She said one staffer even participates in weekly “fraud calls” with other states to share best practices for combating what they all find to be a growing problem.
“We believe our diligence has paid off,” Tax Commissioner Mary Peterson said in the release. “As of the beginning of June, the department detected 504 fraudulent tax returns, putting a stop to more than $900,000 worth of income tax refunds from going out the door and into the wrong hands.”
She expects that figure will exceed $1 million with further investigation, but it’s already almost twice as much fraud compared to 2013.
Spellman confirmed that the cases are “actual, identified fraud” — which implies intentional deception. They do not include taxpayer mistakes caught by department staff, she said.
More than 272,000 tax returns were filed by mid-April — about 14,000 more than the same threshold last year. Staff worked overtime and weekends to keep pace. By the end of May, a total of 347,425 returns had been received.
And fewer of them are coming on paper. The department stopped bulk distribution of tax booklets this year, in part because so few were getting used. Less than 30 percent of the booklet forms were submitted in 2013.
“Because the department printed and distributed fewer booklets in 2014, it delivered a savings to Vermonters in printing costs alone of more than $15,000 over last year.”
Peterson said continued implementation of electronic services will lead to more savings and greater ease of filing for taxpayers.
Hold times for phone calls average 28 seconds, according to the release. And the department is seeing a high level of compliance with the new requirement for annual homestead declarations.
