Because of the last-minute tax deal reached by Congress, the Internal Revenue Service only recently started accepting all types of tax returns. Globe reporter Todd Wallack recently spoke with Amy Pitter, commissioner of the state Department of Revenue, about the delay and other issues affecting Massachusetts taxpayers.
How is the tax season going?
The feds were a little bit delayed because they were trying to integrate all the changes from the year-end haggling. We opened on time, but there were fewer filers in January or early February than we would expect. The other thing this filing season is we are really on the lookout for fraud and identity theft.
What’s the issue with fraud?
The issue is people steal identities from other people. There are crime rings and their whole goal is to steal identities and use them to file tax returns.
Do they all file for huge refunds?
No, they don’t. In some cases, they might file 10,000 returns for $200 each on the theory they will go through more quickly. There are a lot of people thinking hard about how to beat us and we’re thinking hard about how to stop them. Last year, we actually stopped $20 million in refund fraud.
Is this a new issue?
It’s a growing industry. This business of identity theft has taken off.
You launched DOR 360. Can you tell me about it?
When you have a 360 review, you get reviewed not just by your boss, but by your subordinates, your peers, and maybe your customers. We don’t want to just rely on our internal reports, but let’s find out what taxpayers are thinking. We set up an advisory council.
What’s the advisory council?
We have 16 members. We have the big law firms, the big accounting firms, but we also have Greater Boston Legal Services, the Massachusetts Business Roundtable, the Massachusetts Council on Aging. . . .
Have you gotten good feedback?
We have met once and we definitely found that their main interests are in customer service and communications and dispute resolution and mediation.
As you meet with people, have you run into much hostility toward DOR?
No. People are very excited about the department becoming more accessible and transparent.
What do you think of the tax system?
It’s a voluntary compliance system. We bring in $22 billion a year in revenue and we do audit assessments of $1.1 billion and collections on delinquencies of $1 billion. What that says to me is the voluntary system works well.
How do you know what the total is you should be collecting?
We don’t know. But the main reason to think we are doing a good job is because we have a very data driven audit program. We are catching a lot.
Some people complain the tax system is too complicated. What do you think?
Some of it needs to be solved at the federal level, because it is hard to go it alone. In some ways it is more complex if you try to break away.
I’ve heard people say Massachusetts is more aggressive than other states in collecting taxes. Is that true?
I think the whole “Taxachusetts” thing is a misnomer. When you look at the full range of taxes, we’re really not even in the top tier. In terms of our audit programs, there may be some states that don’t try as hard as we do, but I don’t think that’s being aggressive — that’s helping people get it right. Some people underreport.
You have an older workforce. How big an issue is that?
It’s a big issue. We are going to have about 100 people a year retire over the next five years and they will be our most experienced people. It’s going to create stresses and strains. We need to think about how we take more junior people and get them so they can step into these senior roles as people retire.
Do you do your own taxes?
It’s complicated because I am in a same-gender marriage, so I have to file individually at the federal level and jointly for Massachusetts. We use a practitioner for our Massachusetts return, but I file my federal on TurboTax.