BRUNSWICK, Ga. - Taxpayers throughout Georgia who accidentally overpaid their 1999 state income taxes should receive a collective $5 million in refunds in the coming months.
In the past, if the taxpayers or their accountants didn't discover the overpayments, the state simply kept the money, said state Sen. Tommie Williams, R-Lyons, who had introduced legislation to compel the state Revenue Commission to return the money.
Mr. Williams said he is mystified why the state ever decided it could keep money that belonged to taxpayers.
"The best you can say is they've neglected to notify the citizens of the overpayment," and it could be argued that the state simply kept money to which it was not entitled, Mr. Williams said.
He also expressed dismay that no consciences were hurt.
That job fell to someone a long way from Atlanta.
Richard McMinn, a Brunswick certified public accountant, brought the problem to Mr. Williams' attention in 1999. Mr. McMinn said he discovered it as he prepared the tax returns of an elderly woman who had investments and other income. Tax laws require people who have interest income from investments on which no taxes are withheld to make quarterly payments to the state and federal governments based on their estimated bill, Mr. McMinn said.
Mr. McMinn said he advised the woman to make those quarterly payments and she did, but she accidentally mailed IRS payments to the state Department of Revenue, which endorsed the checks and deposited them, Mr. McMinn said.
When he inquired why his client hadn't been given credit for the overpayment, he was given an unsuitable response, Mr. McMinn said.
"It was like I was up against a brick wall. The answer was, `We just figure if people overpay us, they'll ask for it,'" Mr. McMinn said.
Mr. Williams said he thought it was an isolated case but learned it was widespread. He approached the Department of Revenue in January 1999 to ask it to notify taxpayers of the overpayments so they could claim the money on their tax returns.
The Department of Revenue promised to change its regulations to return the money. But with no action after a full year, Mr. Williams introduced Senate Bill 314 in January to compel the state to notify taxpayers of overpayments.
While the bill was in the Senate Finance and Public Utilities Committee chaired by Sen. Nathan Dean, D-Rockmart, Revenue Commissioner T. Jerry Jackson agreed to the regulatory changes.
Lowell Umbarger, director of the Taxpayer Accounting Division, called Mr. Williams' bill a good idea and said he is confident that taxpayers will be given a chance to claim their overpayments.
A trial run with 150 taxpayers is under way, and in October letters will go to every known taxpayer who overpaid, Mr. Umbarger said. That mailing will be followed by another in December to those missed during the first one, he said.