Vermont Department of Taxes Reports Taxpayer Trends for 2014
The Vermont Department of Taxes announced statistical findings for the 2014 tax season showing a rise in tax refund fraud in Vermont, a decrease in paper-filed returns coupled with an increase in e-filed returns, and other taxpayer trends in Vermont.
Tax refund fraud on the rise According to Tax Commissioner Mary Peterson, a top priority for the department is guarding taxpayers and taxpayer money against tax refund fraud. “While the additional scrutiny affected the timing of some refund payments, it is critical to protect taxpayers,” Peterson said. “We believe our diligence has paid off. As of the beginning of June, the department detected 504 fraudulent tax returns, putting a stop to more than $900,000 worth of income tax refunds from going out the door and into the wrong hands.”
Peterson said that so far this year the department has already identified almost twice as much fraud compared to the previous tax year and anticipates that the amount of fraud stopped for the 2013 tax year will exceed $1 million. She warned that tax fraud is on the rise nationally and will require continued and diligent monitoring by the department.
Tax return volume higher than last year As of mid-April, more than 272,000 Vermont tax returns poured into the department, nearly 14,000 more than during the same timeframe in 2013. To handle the higher volume, department staff worked overtime and weekend hours to process returns. Following the April 15 deadline, the volume slowed. By the end of May, the department received a total of 347,425 tax returns, which was still ahead of last year’s total by 3,700 returns.
Homestead declarations on track In addition to tax returns, homestead declarations have also come in at a steady pace. Peterson said she is pleased with the high level of compliance. This is the second year after a change in Vermont law requiring the annual filing of homestead declarations, and the department saw good compliance by the
Agency of Administration
State of Vermont
Department of Taxes
133 State Street
Montpelier, VT 05633-1401
April 15 deadline with 165,332 declarations filed on time, surpassing the total received on time in 2013 by more than 2,000.
Email communication becoming more popular with taxpayers The department experienced a significant shift in the volume of emails and phone calls during the tax season from January to April. According to Sharon Asay, director of the department’s Division of Taxpayer Services, both taxpayers and department staff are turning to the convenience of email to communicate. The number of phone calls fell by nearly 4,000 compared to 2013, while the volume of emails rose by about 500 from last year. The average time “on hold” for taxpayers calling the income tax section was only 28 seconds. Asay said that email communication is a more efficient way for her staff to communicate with taxpayers and hopes the trend will continue.
Paper-filing falls, e-filing rises Over the course of several tax seasons, department statistics show a steady decline in taxpayer use of forms from the printed income tax return booklets distributed in bulk through post offices, town offices and libraries. With each successive tax year, more taxpayers have been printing their booklets and forms from the website or commercial tax software they have purchased, or they have been e-filing. In 2013, for example, of the 64,200 booklets distributed in bulk for the 2012 tax year, 17,613 or 27 percent of booklet forms were actually used to file tax returns, indicating 73 percent were discarded and never used for filing returns.
To reduce waste and control costs for the 2014 tax season, the department opted to discontinue bulk distribution. Booklets are available in electronic form on the department website or in paper form ordered directly from the department. The department distributed about 13,400 printed tax return booklets this year. As of May 24, only 6,696 forms from the paper booklet have been received, showing that compared to 17,613 returns received in 2013, an even greater number of taxpayers are either obtaining their tax forms from other sources, such as the department website, or e-filing. Because the department printed and distributed fewer booklets in 2014, it delivered a savings to Vermonters in printing costs alone of more than $15,000 over last year.
As more taxpayers turn to e-filing each year, the department anticipates that the need for printed materials will drop further. Thus far in 2014, e-filed returns represented 78 percent of all returns received, including an increase of more than 4,000 returns filed electronically through Vermont’s Free File. Peterson said she expects e-filing will continue to gain popularity, requiring the department to further enhance its electronic services.
According to Peterson, the department monitors developments in tax policy and administration at the federal and state levels in an effort to make tax administration more efficient and easier for taxpayers to voluntarily comply. She added that as the department implements more electronic services in the coming years, efficiency will increase, offering greater convenience for Vermont taxpayers.