Connecticut taxpayers waiting for their state income tax refunds may be surprised to get an unexpected letter instead.
The state's deficit reduction budget tasked the Department of Revenue Services with saving the state $10 to $15 million by weeding-out fraud and identity theft among tax filers. The state's efforts to curb fraudulent tax returns helped save approximately $9 million last year.
But the letter, called the "refund protection notice", is raising questions.
"This is the first year I've ever gotten a letter like this," said Shelby Stephenson of North Grosvenordale. "I've claimed my kids since they were born. I've never had any issues."
The letter Stephenson received said her tax return was being flagged for inconsistencies and that the state needed more information from her to process it. But in this age of scams and identity theft, how could Stephenson be sure it was legitimate?
"People are investigating to make sure they are saving you but then, in turn, you need to investigate to make sure that they're being truthful," Stephenson said.
DRS commissioner Kevin Sullivan said it's a good sign that taxpayers are being hyper-vigilant when they receive the letters.
"People naturally are suspicious, but the flip side of that is that the response we've had from the people calling in has been very grateful," Sullivan said.
Sullivan said most taxpayers who receive the letters are not at risk. However, the state is ratcheting up its efforts to make sure refunds are not stolen or fraudulently claimed. Sullivan said there are cases in Connecticut where people steal identities, file false claims in someone else’s name and even monitor death notices to cheat the system.
"Every taxpayer that takes money out of the system that's not entitled to, essentially is making it harder for us, as a state, to do what we need to do," Sullivan said.
Taxpayers who receive the letters are asked to call the listed phone number and answer a few personal questions. Sullivan would not describe the questions. However, he said they are meant to find out if the filers are who they say they are.
Taxpayers who receive the letter must contact the state or else their refunds will not be issued.
Stephenson called the number, answered a few questions and received her refund a few days later.
"It is kind of a lift off the shoulders to know that they're stepping in and taking action on that part," Stephenson said. "I think maybe it needs to be a little different."
The state is also building a website that is expected to help taxpayers answer the questions and the main DRS website offers helpful tips on fighting identity theft.