Second audit launched into Missouri income tax refunds process

Nicole Galloway
Nicole Galloway

EDITOR'S NOTE: This story was modified at 11:40 a.m. Wednesday, 3/21/2018, by removing a paragraph that contained inaccurate information.

Just two months after reporting Missouri's Revenue Department last year deliberately delayed issuing refunds to some income taxpayers, State Auditor Nicole Galloway has launched a new audit of the same process.

"When we released the audit in January, we found the administration was balancing its checkbook on the backs of working Missourians," Galloway said Tuesday in a news release. "Taxpayers were rightfully frustrated because they waited months to receive their tax refunds from the state.

"This audit will look at whether the administration is addressing these concerns and getting taxpayers the money they are owed."

Anne Marie Moy, the Revenue Department's Communications director, told the News Tribune: "We believe the auditor will see we have to-date made significant improvements over prior years. We hope to see that trend continue."

Galloway noted the Legislature changed state law in 2015, requiring the Department of Revenue to make refunds within 45 days or pay interest on the delayed payments.

The old law had allowed a 90-day delay before interest was due.

After Missourians complained of delays in 2016, Galloway launched her first audit last year to see if the Greitens administration had improved the situation.

Instead, the audit released in January reported the state has paid individual income tax refunds in an increasingly untimely manner - with significant delays in fiscal years 2015, 2016 and 2017 - and the delays worsened considerably in 2017, with 155,000 refunds paid with late interest, an increase of 86 percent over the 2015-16 business year.

That finding was in addition to the at least 400,000 refunds paid late with no interest, Galloway said.

Moy said the Department of Revenue didn't have any numbers to report about making refunds so far this year, but told the News Tribune: "(We) are looking forward to sharing this year's results once we are able to analyze the full picture."

And, she said, the department is continuing to focus "on transforming the department and enhancing the customer experience for Missouri citizens and businesses."

Galloway said the January report revealed the administration has directed the refunds delays in order to pay other state expenses first.

Additionally, she said, the state's decreasing cash balance results in less money to pay Missourians what they are owed.

Galloway's news release noted the January report was prepared and issued "despite unprecedented attempts by the current Governor's administration to obstruct audit work. Throughout the audit process, auditors faced repeated delays and unwillingness by the administration to provide the requested documentation."

She encouraged people with information or a complaint to contact the State Auditor's Whistleblower Hotline, 800-347-8597, by emailing [email protected], or by using the submission form at auditor.mo.gov/hotline.

Galloway became state auditor in April 2015, when she was appointed to the post following elected Auditor Tom Schweich's suicide just over one month into his second term.

She has filed as a candidate for her first statewide election to the post.

With one week before the filing deadline, she had no primary election opponent - but four Republicans and a Green Party candidate have filed to challenge her.