Tax refund delays frustrate taxpayers

Many Delawareans are still waiting to receive their 2023 tax refunds

Over the past few weeks, social media has seen an uptick in Delawareans complaining that they have yet to receive their tax refunds from the State of Delaware despite filing electronically several months ago. According to the state, the Division of Revenue has received over 560,000 tax returns with over 349,000 requesting refunds.

“Over 260,000, 74.5 percent of all 2023 requests, have already been issued,” Melissa Marlin, Deputy Principal Assistant in the Delaware Department of Finance, said. “While the Division of Revenue’s automated systems indicate it can take 10 to 12 weeks for review, the average processing time to date has been six days for returns that have not required an agency review. More complex returns flagged for data inconsistencies, fraud review, or lack of documentation are averaging 43 days.”

According to Marlin, the state does not operate like the federal government who issues refunds and then checks returns after the filing season. Delaware now reviews most returns for errors or anomalies before they will release refunds.

“Processing is delayed if the return contains errors, requires missing documentation or has other listed claimed amounts that require further validation,” Marlin said. “Individuals receiving requests from the Division of Revenue for additional documentation are encouraged to supply that information as quickly as possible to improve processing times and expedite refunds.”

Despite this explanation from the state, many taxpayers are claiming that they have received no request from the state for additional documentation. Some have called the Division of Revenue and been told there seems to be no reason why they have not gotten a refund.

“We filed in January. I’ve called at least three times now,” Amber Kendzierski said. “They said none of them were even accepted until February 15 and then it could take 12 weeks. I called at the 12 week mark and was told that she didn’t understand why it hadn’t been released yet and that she would push it through. We are still currently waiting for our refund weeks later.”

Debby Dufendach echoed the sentiments of Kendzierski.

“We filed electronically mid-February and have not received our refund,” Dufendach said. “I called and they said, “we are having delays, please be patient.”

Steve Anderson reported that when he called the Division of Revenue after 18 weeks of waiting, he was told that the only about 40 percent of refunds had been issued as each return was being “checked manually.” This was confirmed by Russell Holleger, a tax consultant with My Tax Guy.

“I have a number of clients that have experienced long delays in getting their Delaware tax refunds.  It is my understanding that Delaware has been slow getting refunds out for several reasons,” Holleger said. “A couple of years ago they started doing a manual review of all tax returns to verify that the income and withholding matches the information reported.  They started doing the extra review because of the growing amount of tax fraud.  Tax fraud has become such a huge problem in recent years and taxing authorities are having to do more to combat the issue.”

These fraud safeguards have created challenges when it comes to processing tax refunds, Holleger continued.

“Most income documents are reported to the Division of Revenue electronically and the information is match to the tax returns to verify the information,” Holleger said. “For taxpayers that they can’t find the information in their database, they send out letters requesting additional information to be submitted.  Delays in responding to the letters and the then Division processing the response slows things down.”

This could mean a tax refund is delayed because the Division of Revenue is waiting for confirmation from an employer, mortgage company or other entity who has been listed on an individual’s tax return and not the taxpayer themselves. Holleger also stated that a new software was deployed at the state recently.

“The Division of Revenue deployed a new software system recently that is also causing some delays and errors.  That is a usual side effect of any new software system that is custom built around the state’s unique tax system and requirements,” Holleger said. “The letters and notices generated can be difficult for the layperson to understand and often are sent well after the tax return was filed.  Many of my clients recently received notices for tax year 2022.  That is over a year after the return was filed.”

Anderson stated that he was told by the Division of Revenue that those who received their refunds in a week or so were “lucky” and that he was far from alone in waiting for his refund to be issued.

“A good tax practitioner will be an advocate for their client and help them with solving the issue.  They know the best contact phone numbers to call and speak the language when talking to the Division,” Holleger said. “While most Division employees are well versed in tax law, it is not uncommon to have to provide a deeper explanation to a division employee on more complicated matters.  All of my clients have received their 2023 refunds within a week of contacting the Division after I contact them to work out a resolution.”

Taxpayers can check the status of their refund by visiting the “Where’s My Refund?” page on the Division of Revenue website. Holleger stated that calling was also an option, but that wait times can be lengthy. Others who have called reported that they were told exactly what was on the website with no explanation for why there was a delay.

“Contact your tax practitioner if you used one to have them do the follow up,” Holleger said. “Any that are worth their salt should be glad to do that. They know what the Division is looking for and should also have copies of all the source documents used to prepare your tax return to send.”

Marlin also suggested calling 302-577-8200 or emailing DOR_publicservice@Delaware.gov.