Indiana blocks $78 million in wrongful tax refunds

Indiana tax investigators say they have blocked $78 million in illegitimate income tax refunds from being collected.

The state Department of Revenue says a special investigations unit discovered more than 39,000 returns relying on identity theft to falsely claim $39 million. State investigators are building cases to present to prosecutors by the end of the year.

Another $39 million in wrongful claims came from legitimate filers who could not provide evidence they deserved specific tax credits or deductions.

The agency determined some of those cases to be honest mistakes while others appeared to be intentional cheating.

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