Corrected income tax forms are in the mail, soon

PHOENIX – Good news for Arizonans waiting to prepare their tax returns.

The forms they need aren’t quite in the mail yet. But they will be – soon.

That’s the word from the state Department of Revenue, which disclosed last week it had sent out incorrect information to about 580,000 taxpayers about how much income they needed to declare when they file their 2016 federal tax returns.

Department spokesman Ed Greenberg said Friday, Feb. 3, the corrected 1099-G forms have been prepared and printed. He said the plan is to drop them in the mail on Monday.

Just the printing is costing taxpayers $19,000.

As to those mailing costs, Greenberg said he has no idea. But if the state has to pay first-class postage on each of the new envelopes, that will add another $284,000 to the tab.

The 1099-G forms are supposed to represent what the state paid each taxpayer in refunds last year from their 2015 tax returns. But the numbers that went out to each of the 580,000 who got refunds reflected the amount from their 2014 returns.

What made the problem more serious is that the Department of Revenue sent the correct numbers to the Internal Revenue Service. And what that means is that anyone who files a federal tax return with different figures than what the IRS already has is likely to get an inquiry from the agency.

So what went wrong?

The official explanation is that “a data file transfer error occurred as part of the mail-out process.”

In simpler terms, Greenberg explained it as there was a step in the process where the data going out was supposed to be checked.

That didn’t happen.

Greenberg said steps are being taken to be sure it doesn’t happen again. “We’ve modified it with some additional checks and balances,” he said.