Individual taxpayers who are owed refunds from the Centax-Don Wilkinson Agency for the 2011 tax year likely will not see their money for another six to 12 months, an official with Berkheimer & Associates said Thursday.
An Allegheny County judge on Monday appointed a receiver to take control of Centax, but the receiver is only overseeing the distribution of Earned Income Taxes and other taxes that are due municipalities and school districts, said John DeRemer, a vice president with Berkheimer.
DeRemer said the receiver is now negotiating with several firms, including Berkheimer, to resolve significant issues Centax had in processing 2011 individual tax returns. He said he expects a firm will be hired within the next few weeks, but it will take months to straighten out the problems.
Whoever is hired will receive the records and start work on them, but it could be six to 12 months before that's done, he said.
Pam Heard, finance director for Nanticoke, said she has received numerous complaints about late refunds. Centax collected taxes for roughly half of communities in Luzerne County, she said.
DeRemer said no one knows exactly how many people are waiting for refunds, but he has heard estimates as high as 50,000 people statewide.
The failure to process returns is among several problems Centax encountered with 2011 individual tax returns, DeRemer said. Some taxpayers who did get refunds were paid the wrong amount, while others got checks from Centax, only to see them returned by for insufficient funds, he said.
DeRemer said the erroneous amounts on checks were caused by a glitch in Centax's system that caused the decimal point to be placed in the wrong place. That meant some people who were owed $600 got $60, while some who were owed $60 got $600, for example.
Kingston Administrator Paul Keating said he has received complaints from residents who were charged fees by their banks for the bounced checks. He said he is hopeful those residents will be refunded the extra money, but DeRemer said that's not likely.
There's no money for them to go after, DeRemer said.
Centax was covered by a performance bond, but DeRemer said the bonding company only insured Centax's performance as a tax collection agency.
I don't think a bonding company would consider a check that bounced as being their responsibility, he said. I guess (residents) could make a claim on the bond, but I'm not sure its going to be worth it for them.