Refund glitch cost taxpayers $50,000 to fix

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Remember what happened in January, when the state deposited tax refunds into Georgians' bank accounts, then quickly took the money out with no explanation?

That foul-up ended up costing taxpayers $49,633. Of that money, the state Department of Revenue paid $20,972 in overdraft fees to cover those who spent their refunds, only to discover they had been taken away. That left their bank accounts overdrawn.

While many banks forgave their customers' fees, some did not.

Other charges as of Feb. 28 include $21,927 to send out letters to those affected. The state also paid $6,733 in fees to Bank of America for sending out, rescinding and then redepositing the refunds.

Documents obtained by The Atlanta Journal-Constitution indicate that a change in tax law -- which no longer allowed Georgians to claim the state Low Income Credit -- was likely at the base of the problem.

The department's Information Technology Division made computer programming changes to reflect the difference, but the credits were added back in the refunds by another part of the computer system.

It is unclear if those state employees responsible for the error had been disciplined.

"As a matter of policy, the department does not comment on personnel-related matters," spokesman Reg Lansberry wrote in response to the question.

"I personally think that whoever did that should be fired. I would be fired if I did that," said Bill Nemeth, the president of the Georgia Association of Enrolled Agents, a trade group for tax preparation experts.

In the middle of January, the department deposited more than $12 million in tax refunds in the bank accounts of 32,000 Georgians.

It then realized that a "computer error" had caused $633,000 in overpayments to some of the recipients, and began immediately rescinding the deposits.


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