Many questions surround state tax refunds

March 19, 2010 5:31:37 PM PDT
It's no secret North Carolina, like a lot of other states, is having serious income issues in the midst of a recession. So serious, they don't have the money to pay all the refunds already filed.

Taxpayer Don Elderkin's refund is just under $400, which he says is not crucial to his or his wife's welfare, but he can imagine it is vital to many others.

"It's the principal, and I just don't understand what they're doing in this state," Elderkin said. "I can just picture some poor little old lady at home that needs $50 or $100, whatever's coming to her for food and pills. Where is it?"

Elderkin spent weeks on the phone with the revenue department where a recording told him the same thing - that they had received his tax return.

Finally he managed to get a real-live person on the phone who told him, "we're broke and I can't tell you when you're going to get your refund."

And what really gripes Elderkin, and especially those who owe money and work hard to meet the April 15 deadline, is if they missed it, they would have to pay the government interest and penalties.

"Why don't they give me interest on my $396," Elderkin said.

And the state will have to pay interest if taxpayers' refunds are not received by the end of May.

"If your refund hasn't been issued on or before May 30 it will actually, as of May 31, begin to accrue interest at a rate of 5 percent that will be paid back to the taxpayer," Beth Stevenson with the North Carolina Department of Revenue said.

However, if that state does have to end up paying residents 5 percent interest, it could put the state deeper in debt - debt that will ultimately come out of taxpayers' pockets.

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