Taxpayers frustrated over late state returns

The state of Colorado may owe you more than you expected on your state tax return.

The law requires the Colorado Department of Revenue to deliver refund checks within a specific time of filing, otherwise it must pay a late penalty plus interest.

Here is the timetable for how long the state has to deliver a return:

If filed by January 31, the state has 14 days.
If filed by February 28, the state has 21 days.
If filed by March 31, the state has 28 days.
If filed in April or later, the state has 45 days.

If the state misses a deadline, it owes taxpayers 5 percent of their return plus interest. For refunds less than $5,000, the interest is the prime rate plus three points, which as of March 9 is a total of 6.25. For refunds more than $5,000, the interest is prime.

There are five exceptions listed in the state statute:

Errors on the return when filed (includes, but not limited to, erroneous or illegible tax ID numbers, misspelled names, calculation errors, missing required documentation or certifications, and unclaimed payments)
Unforeseen delays caused by the failure of the processing equipment; equipment includes but is not limited to physical equipment and electronic processing systems
A review/audit to verify the accuracy of the return (does not include any review/audit initiated as a result of a Department of Revenue data entry error)
The return includes a Colorado job growth incentive tax credit
Effective January 1, 2012, the return includes an enterprise zone credit and the Department is awaiting confirmation from the Colorado Office of Economic Development that the taxpayer is eligible for such credit

But it’s unclear whether the Department of Revenue plans to pay any late fees. Tom Baltuskonis, a Jackson Hewitt Tax Service franchise owner in Colorado Springs, told KRDO NewsChannel 13 the only exception he could foresee the state claiming is the third one. Because the state is reviewing for possible fraud, it may claim that as a review of the return.

Several people told KRDO NewsChannel 13 they received their return outside the window specified in the law, but did not receive the late penalty with interest. Some said they were told if they feel they’re owed a late penalty, they need to submit it in writing through the online portal.

A spokesperson with the Department of Revenue said in a written statement that the staff is evaluating how and if penalty and interest will be paid. Each situation is different and will be evaluated on a case-by-case basis, according to the spokesperson, and the department is trying to minimize delays.

In the meantime, many taxpayers are left either still waiting for their tax return, or wondering whether they’re eligible for a late fee.

Chris Bullock filed his taxes on Jan. 21 and still has not received his state return.

“I was planning on using the return for tires on my car that desperately needs it,” Bullock told KRDO NewsChannel 13. “We’re kind of counting on this money and it seems like they’re taking their time with it.”

Baltuskonis said it’s the worst year he’s seen for state returns.

“We’ve been in this for 21 years and this is the first time I’ve seen Colorado being this late,” he said. “We have a tally of how many calls we get people asking for refunds and it’s growing.”

Frustration is also mounting over the Department of Revenue’s phone line. It’s difficult to reach a representative using the help number, 303-238-SERV (7378).

KRDO NewsChannel 13 sat with Bullock as he tried the number four times. The first three calls were immediately met with a busy signal. On the fourth try, Bullock reached the menu options, but when he tried to reach a representative, an automated message said the lines were busy and the call was dropped.

“You can’t get through and when you do, they hang up on you. It’s very, very frustrating,” Bullock said.

Baltuskonis said he was also frustrated with the phone line and is having a difficult time getting answers for his clients.

“We have the same number that every tax preparer has, every client has, and we get the same answers,” he said.

The spokesperson with the Department of Revenue explained in the written statement that there is a higher than normal call volume and asked taxpayers to be patient for their refunds.

KRDO NewsChannel 13 will continue to update this story. You can read state statute 39-22-622 here.