D.C. Pulling Even in the Refund Race
By Peter Behr
For years, District taxpayers have labored under a dual burden: the region's highest individual income tax rates and the slowest tax refunds.
Now the second of those loads has been lifted, officials say. The city this year is taking just less than two weeks to process and mail refunds to taxpayers, putting it on par with tax offices in Maryland and Virginia.
That's a long leap from conditions two years ago, when returns were scattered around tax offices and the District's average turnaround time for refunds was two months.
As efforts to lower District income tax rates gather momentum, what was once one of the District's "most maligned" organizations is closing the gap with its neighbors, says Richard Sella, a 31-year Internal Revenue Service veteran hired two years ago to unscramble the chaotic D.C. tax-processing department.
With tonight's tax filing deadline for the District and Maryland approaching, local tax officials most want to talk about refunds. (Virginia's deadline is May 3, the first Monday of the month.)
Complaints about the D.C. tax system still pop up in conversation with city residents. But outside experts say improvements in the D.C. Office of Tax and Revenue are real.
A stem-to-stern overhaul of the process by Sella and his colleagues has altered the entire process.
"The District historically has been terrible," said Thomas P. Ochsenschlager, a partner with Grant Thornton L.L.P.'s national tax office in the District. "I get a clear impression it has turned a corner."
The underlying message for a critical public is that even tax collectors care about customer service.
In addition to touting the speed of refunds processing, officials in the District, Virginia and Maryland point to their Internet sites where last-minute filers can download tax forms they still require, including the document offering a four-month extension on filing returns. And they proudly cite the growing number of taxpayers taking advantage of electronic filing the fastest way to secure a refund.
For the District to measure up to its neighbors required a Herculean effort, government officials and outside experts agree.
When Sella arrived five years ago, he found 2.3 million old, processed tax returns jammed haphazardly in boxes, making investigations nearly impossible.
"Returns sat in trays, sometimes on desk tops. Stacks of paper were everywhere," he said. "Stacks fell together. Checks were mishandled."
It was primarily a problem of poor organization, not problem employees, he said. "People were working late and long, trying very hard to get the job done. But they didn't have the management tools or guidance."
The operations have moved to new offices on North Capitol Street NE where returns are processed at special, cubby-holed desks designed by one of the office's supervisors, Edgar "Sonny" Whitten, to speed different kinds of returns in the right direction.
Whitten struggled for nine months to get his idea approved and funded. Now the office named the new furniture "Sonny" tables, in gratitude.
At the same time that it strives to deliver refunds faster, the tax and revenue office has tightened procedures to make sure that taxpayers don't get more than their due as officials suspect has long been the case.
A new questionable refund detection team has challenged $3.6 million in claims so far this year. Yesterday, the District's corporation counsel filed a misdemeanor complaint against a current and former tax office employee and three alleged accomplices charging that they had carried out a fraudulent tax refund scheme. Officials would not discuss the amount of the allegedly false refunds.
As D.C. tax officials pay more attention to returns, the potential for conflicts with taxpayers is likely to increase. But that is just the flip side of improved customer service, the officials say.
"The issue for us is, we have an obligation to make sure that the taxpayer money is properly protected, monitored and accounted for," said Natwar Gandhi, deputy chief financial officer.
© Copyright 1999 The Washington Post Company