Monday, July 8, 2013


The clean version is “damned fool bureaucrats”.

Several clients have emailed me lately to complain about late refunds from manually, but timely, filed NJ-1040s.  More so than in past years.

As a point of information – NJ filers can now check on the status of their NJ state tax refund online at the website of the NJ Division of Taxation (NJDOT).  You can click here to begin the process.

The clients whose refunds have been delayed were all expecting paper checks.  This is because NJ taxpayers cannot request direct deposit on manually-filed returns – even though a directly deposited refund is cheaper to process than a paper check.  In order to request direct deposit a NJ taxpayer must file electronically.  To be honest, this makes absolutely no sense.

Since I cannot submit my client returns electronically as I do not, and at this point will not, use flawed and expensive tax preparation software, whenever possible, and when the client does not specifically “opt-out”, I file my client NJ-1040s “electronically” via NJWebFile.  Unlike federal returns, I can submit NJ-1040s for full-year resident taxpayers directly to the NJDOT online via NJWebFile.  Unfortunately, there are many unnecessary limitations on the returns that can be submitted via NJWebFile, and I am forced to manually file a lot of NJ-1040s due to these limitations. 

For example, the software for the NJWebFile program has never been updated to provide for excess Family Leave Insurance employee contributions – NJ taxpayers with two or more employers must file manually in order to get a refund of excess FLI insurance withholding.

The State of New York purposely delays the issuance of paper refund checks.  NY wants taxpayers to request direct deposit of refunds – which can be done on manually filed returns.  But New York has clearly told us that this will happen.  I am not aware of any announced NJDOT policy of purposefully delaying paper refund checks. 

NJDOT has never been known for its competence, or even its honesty.  While the IRS will contact taxpayers, or issue refunds, almost immediately after receiving an overpayment, double payment, or payment that it cannot properly identify – NJDOT, I believe purposely, remains silent, hoping that the taxpayer will not discover the over or double payment and the State can keep the money.

The fairly new Director of the NJDOT, Michael J. Bryan, has proven to be a big disappointment.  Nothing has changed under his leadership.  He did create a NJ version of the IRS Taxpayer Advocate Service, but my correspondence to the NJ Taxpayer Advocate on the systemic problem identified above, and a specific example thereof, has been totally ignored.
Have any of the NJ tax pros reading this also experienced excessive delays in the issuance of client paper refund checks?

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