Colorado agency: Fraud checks could delay some tax refunds

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DENVER | Colorado officials are carefully reviewing tax returns after seeing an increase in fraud, meaning taxpayers might have to wait longer than usual for refunds, a spokeswoman said Wednesday.

The state Department of Revenue faced a similar challenge last year and responded by mailing paper checks to addresses on record instead of directly depositing some refunds.

The costly procedure was prompted by an increase in stolen identity information used to file fraudulent tax returns. The federal Internal Revenue Service and other states are seeing similar problems.

Department spokeswoman Ro Silva said some paper checks will be issued this year. In some cases in which fraud is suspected, the refund process will be halted and the taxpayer will be asked to provide additional information.

Taxpayers who get checks will receive a letter directing them to contact the department if they have not filed a return or were not expecting a refund.

Taxpayers who file a correct and complete return in February should expect a refund in 21 days under state law, Silva said. This year, however, some returns could take up to 60 days longer to process.

“Detecting refund fraud has become the new normal,” Silva said, asking taxpayers to be patient. “It’s part of what our society is dealing with.”

Last year, about 85 percent of Colorado taxpayers filed electronically, a method that is convenient for them and the revenue department, Silva said, noting the department had no plans to limit electronic filing.

She would not elaborate on steps being taken by the federal Internal Revenue Service and other states.

“We don’t want to tip off the fraudsters,’ she said.