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Alabama Delays Tax Refunds To Catch ID Theft

Victims of the severe storms and flooding last week in Alabama may qualify for some tax relief.
istockphoto
Victims of the severe storms and flooding last week in Alabama may qualify for some tax relief.

Alabama's Revenue Department slowed about 100,000 personal income tax refunds this year because of a new computer program designed to catch identity theft and tax fraud.

Revenue Commissioner Julie Magee says identity theft has become such a problem that her department used the program to watch for fraud clues. That means some taxpayers have waited longer than normal for their tax refunds and will be paid 3 percent interest as required by state law.

Magee tells al.com that she would rather pay interest to taxpayers than make payments to identity thieves.

The state owed nearly $19.9 million in refunds as of Wednesday and had more than 13,700 individual returns left to process. That compares to 1.85 million returns processed and more than 1 million refunds issued.

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