MYRTLE BEACH, SC (WBTW) – In an effort to keep your money out of criminals’ hands, the South Carolina Department of Revenue put new rules in place to crack down on tax refund fraud.
That means if you expect to get a state refund this year you will have to wait until after March 1st, no matter how early you file.
News13 spoke to an area tax prepare who has experience with tax fraud first hand.
Kenneth Ferrick has been a tax preparer since 1972, “when I first started we had to do it all by hand.”
Now it’s almost all done by computers and that’s meant the big changes in how fast tax returns can be processed.
Ferrick says it’s the rush to get taxpayers their refund that has created the risk for fraud. Employers W-2’s often don’t reach the IRS until after employees refund checks have been sent out.
“The state of South Carolina has come out with holding refunds until they can match the employers W-2’s with the employee’s W’2’s,” said Ferrick.
The Department of Revenue says the delay will give the agency time to verify documents with the IRS to make sure state returns are legitimate.
“This is money that is being stolen from our government, from our taxpayers and it just, we have to address it,” said Department of Revenue spokesperson, Ashley Thomas.
Fraudulent tax returns are a problem everywhere; in Myrtle Beach, Ferrick ran into a case 3 years ago that cost the state $50,000.
“They looked like real W-2’s and we processed them,” said Ferrick.
He was handling returns for a client, but multiple, nearly identical claims raised a red flag; so he reached out to the state.
“They sent people to our office, got copies of the returns and went after the individuals,” Ferrick said.
Though the case was prosecuted, Ferrick said 10 returns worth $5,000 each were paid out.
“We tried to stop the funds from going to the taxpayer but we weren’t able to,” said Ferrick.
Experts say $6 billion is stolen annually by criminals filing false tax returns.
The tax preparers we spoke to say the new rules won’t effect how you file your taxes.
Taxpayers who file after March 1st, can expect to get their refunds within two to three weeks.