Other title: Ohio Department of Taxation

"Date of Report: November 21, 2013."; Includes bibliographic references.Report -- Exhibits -- Agency response.In the course of an investigation involving the theft of tax money by former Ohio Department of Taxation (ODT) employee Kathleen Hyre, the Office of the Ohio Inspector General (OIG) found Hyre concealed the thefts by moving overpayments on a given taxpayer's account, to a second taxpayer's account. During the investigation, the Office of the Ohio Inspector General learned the overpayment balances held by ODT for corporate franchise, employer and school district withholding, and sales and use taxes, appeared to be of a significant size. On July 18, 2012, a final list was provided to the Office of the Ohio Inspector General by ODT and it consisted of more than 680,000 tax periods with an amount in excess of $294 million. If a taxpayer does not request a refund within a three- to four-year statute of limitation, depending on tax type, the taxpayer is no longer able to do so and the monies stay in the general fund for use by the state. Pursuant to the Ohio Revised Code, taxpayers paying corporate franchise taxes have three years to request a refund, while taxpayers paying employer withholding, school district withholding, and sales and use taxes have four years. ODT had a policy of not informing taxpayers of overpayments that may have been refundable even if a taxpayer called with questions about their account. An email sent to the sales and use tax section dated April 5, 2011, and located by the OIG stated, "While reviewing a taxpayer's account and you notice a period is overpaid. [sic] Please do not inform the taxpayer that they are overpaid. Even though the period might be overpaid, it may not be a true overpayment." As the Office of the Ohio Inspector General identified this issue, ODT immediately began a review of the list to determine why the overpayments occurred for each tax type, and ordered each tax section to determine if the overpayments were refundable or not