A procedural change by the State Tax Commission has localaccountants scrambling to respond to agency letters seeking backtaxes, some possibly in error, from their clients.

“We’ve had numerous people bring in notices they got,” said LynnDavis, a bookkeeper with Berch and Associates. “It’s been a pain. Ithink most of them were erroneous.”

In late Septemember, the State Tax Commission mailed more than40,000 letters seeking back taxes, said Kathy Waterbury, presssecretary for the agency. Waterbury said there were three reasons ataxpayer could have received a notice – the person owes the tax,the taxpayer made a math error or supplied incomplete information,or the commission’s automated processing did not read the returncorrectly.

“The difference is this year we ran them out all at one timerather than sporadically,” she said about the notices.

The procedural change has had an effect statewide as taxadvisors struggled to manage the influx from clients receivingnotifications. Some have legitimate discrepancies, but others donot.

“We’ve seen quite a few – in total about 25 to 30 notices we’vehad to respond to,” said Mary Helen Miller, an accountant withPatrick Miller White and Company. “I’m sure there are still some wedon’t know about yet.”

It is impossible to tell a legitimate notification letter froman erroneous one without verification from the commission, Davissaid.

Although the mailing has cost the company in lost manhours inhandling the letters, Miller said clients have not beenaffected.

“I can’t speak for every firm, but we’re not charging ourclients to respond to these because it’s not their fault,” shesaid. “We’re telling our clients to wait until we determine theletter’s legitimacy before paying.”

Davis said her firm has taken a similar stance.

“There are people upset by getting a notice, but I don’t thinkanyone has made any payments,” she said.

Miller admitted, however, that some clients likely paid thenotice before consulting with the firm.

“You’ll always have some who just pay it first,” she said.

Notices seen by Patrick Miller White and Company have ranged incost from $450 to $3,500, Miller said.

“It just depends on how the computer messed up that person’saccount,” she said. “It’s varied and every taxpayer’s account wasaffected differently.”

Miller said anyone receiving a tax commission notification ofback taxes due should contact their tax advisor before makingpayment on it.

The tax commission has processed 3.2 million returns this year,including 1.2 million Individual Income Tax returns, Waterburysaid.

Despite the confusion surrounding the mass mailout, Miller wascomplimentary of the steps taken by the tax commission to handlethe rush.

“Initially, we were responding to them one on one and then ingroups, but they were bombarded with calls,” she said. “The StateTax Commission has worked real well with us in getting this takencare of. They’re working hard to get it corrected.”

Joe Blount, commissioner of revenue, announced Oct. 11 that hehas temporarily suspended all collection activities associated withIndividual Income Tax notices dated Sept. 24-28. The move isintended to give the tax commission staff time to review eachaffected taxpayer’s account and make corrections to the notices asneeded.

Waterbury said a comprehensive review of the affected taxpayeraccounts has begun, and it will take several weeks to complete.Each affected taxpayer will receive a notice after their accounthas been reviewed.

“Instead of having them call us, we are looking at them one onone to see what has transpired,” Waterbury said.

Taxpayers who have already contacted the tax commission and hadcorrections made to the account will not receive another letterunless there is still an outstanding tax liability, she said.

“We are still processing returns, but we have stopped sendingletters out that we have not looked at,” Waterbury said. “Anyreceived now should have been looked at.”