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DiNapoli's Auditors Halt $24.2 Million in Suspicious Tax Refunds

New York State Comptroller Thomas P. DiNapoli announced his office stopped $24.2 million in questionable or fraudulent personal income tax refunds payments so far in 2018.

"Tax cheats are continuously looking for new ways to beat the system, but my auditors are staying one step ahead of them," DiNapoli said. "My office continues to stop fraudulent refunds from reaching the hands of dishonest individuals and identifying taxpayers who claim deductions that are not rightfully theirs."

To date, DiNapoli's office has paid out 4.9 million state tax refunds totaling $4.8 billion in 2018. Another 140,000 refunds totaling $160.1 million are expected to be paid this month.

The Comptroller's auditors work with the state's Department of Taxation and Finance to stop questionable refunds and to ensure timely payment of those determined to be legitimate. After the Department has completed its review and approved the refunds, DiNapoli's office performs an audit. Using data analytics and an enhanced review process, DiNapoli's auditors act as a second line of defense to stop inappropriate refunds on high risk returns.

The majority of questionable refunds stopped were for returns filed by taxpayers who claimed refundable credits based on incorrect information such as fake or inflated number of dependents or understated income. Auditors also stopped $3.3 million in refunds that were linked to unscrupulous tax preparers filing false returns. Other popular scams uncovered by DiNapoli's office include the use of questionable social security numbers and intentionally misstating deductions.

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