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Tax Refunds Now on Hold in California

January 27, 2009 6:23 PM

ABC News' Teddy Davis Reports:

ABC News has learned that tax refunds are now on hold in California for the first time in state history, according to the state controller's office.

"Unfortunately, we have asked the California Franchise Tax Board not to send over tax refund claims beginning today because we will not be able to process them and have them out the door by Feb. 1 when a 30-day delay in tax refunds goes into effect," Hallye Jordan, spokeswoman to California State Controller John Chiang, tells ABC News.

During the 30-day delay, the controller's office estimates that a combined 2.74 million California individuals and businesses will have their tax refund delayed.

The controller's office estimates that the delay in tax refunds will free up $1.99 billion over the next month to pay for education, debt service, and other payments that legally have first claim to state funds.

California has had no money in its general fund for the past 17 months, and has been paying its bills by borrowing from Wall Street and special internal funds.

If the state's legislators and governor do not reach a budget agreement that brings immediate funds into the state's coffers, the state's borrowed funds will be entirely exhausted at the end of February, according to the controller's office.

January 27, 2009 | Permalink | Share | User Comments (779)

User Comments

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So does this mean that we can't do are taxes? I need me unemployment w2 in order to do this. What is wrongt with the Mr. Terminator? Well now i will refer to him as the terminator who is terminating are money to pay bills.

Posted by: irene | Jan 27, 2009 6:44:45 PM

Despite Ban Obama put in place himself, Another Lobbyist Lands Top Spot in Obama Administration.

Obama waived ethics rules designed to curb the influence of former lobbyists. What a joke Obama is.

Posted by: cunning | Jan 27, 2009 6:55:21 PM

California refuses to reign in spending, they are getting exactly what they deserve. Oh well, I guess they will be able to refund state taxes once Obama and Pelosi send them 40 Billion of our Federal Tax dollars. Nothing like Red States paying the blue Blue states. After all we did lose the election.

Posted by: mike jones | Jan 27, 2009 7:08:23 PM

Can they do that? Is this legal???? And irene - Obama is not the governor of California - a Republican is...just in case you forgot.

Posted by: allie08 | Jan 27, 2009 7:09:31 PM

Print more money you Nazi-bastard! Haha, copy the Wiemar Republics 'solution' to the economic crisis! Repeat history you stupid fools! GO ahead! THE FALL OF THE UNITED STATES is finally here!!!

Posted by: Mister X | Jan 27, 2009 7:10:23 PM

allie08 Obama is not the governor of California - a Republican is

And case a fool like you forgot it was a majority Democrat congress in charge of America who dragged this country into a financial turmoil and voted for war!!!!

Posted by: kik | Jan 27, 2009 7:11:16 PM

California in the news again? Isn't that where all the people live who are getting foreclosed on their $700,000 two bedroom homes that back up to the freeway?

Posted by: Mike Jones | Jan 27, 2009 7:11:24 PM

This is a good example of why you should never overpay your taxes through payroll deductions. It's better to underpay and end up owing at the end. Reduce payroll taxes, stick the money in an interest-bearing savings account and actually make some money before paying state and federal taxes.

I feel sorry for those who are waiting for a tax refund from the state of California.

Posted by: Disgruntled taxpayer | Jan 27, 2009 7:11:45 PM

Unreal! This is really unacceptable. It is difficult to keep things afloat in this tough market. Small businesses are really struggling to keep their doors open. Now, the government is forcing us to loan them money rightfully due to the taxpayers. When the shoe is on the other foot, they treat individuals like criminals. We really need to do better at holding our leadership in government and business accountable!

Posted by: Janette Kimmel | Jan 27, 2009 7:12:28 PM

How much money are the residents of California going to charge the Goverment in interest and penalties for not paying on time?

Posted by: Mike Jones | Jan 27, 2009 7:13:57 PM

Are they going to pay us interest on what they owe us? We have to pay them interest if we are late paying them!

Posted by: Heidi | Jan 27, 2009 7:14:52 PM

"The closest thing to immortality is government programs. Once created, no one has the political willpower to turn off the spigot."

Posted by: California Max | Jan 27, 2009 7:14:56 PM

good luck with that Janette

Posted by: oobe | Jan 27, 2009 7:18:34 PM

kik posts:
"And case a fool like you forgot it was a majority Democrat congress in charge of America who dragged this country into a financial turmoil and voted for war!!!!"

NO! The Congress that approved the Iraq war was Republican controlled.

The financial turmoil is a result of bad decisions and actions made by both Republicans and Democrats -- in Congress, in business and YEP! plain ol' ordinary American citizens. You can't really point a finger in this without three of them pointing the other way.

Posted by: serena | Jan 27, 2009 7:21:33 PM

I live in Simi Valley, CA. 30 Miles north of Los Angeles. I can't believe this. Totally insane. I moved here from Boston 3 years ago and things were good. I am now looking to get the hell outta here.My car registration this year (On time, no late fees was $158. This has got to stop.

Posted by: Kitt | Jan 27, 2009 7:22:40 PM

When you have a Liberal governor and a Liberal congress, this is what you get. A foreshadowing of what may happen in the US government? If I lived in California, I would make sure I increased my exemptions so I would always owe each year, this way the government would not be able to take extra money from me.

Posted by: cbk16 | Jan 27, 2009 7:26:09 PM

Screw that! The government is officially trash! The Unions can take it in the a-- now because they should be treated like any other working joe! That's how we will free up money... and not holding it from the people that actually pay taxes! Not to mention the bozo that might be in charge doesn't even pay his taxes! And now Obama is willingly handing over money to Banks who messed up and gave out crappy loans that people couldn't afford to pay! And the economy and housing is bad because of it! Why should they be rewarded? It's all political game and people need to speak up and stop being toyed around with!

Posted by: Alexis | Jan 27, 2009 7:28:54 PM

Mike jones oh crap forgot to tell the wild fires they can not burn the past few years. I beleive California had 4 to 5 very large fires all over the state last season. I guess we could just let it all burn then to go and pay those men and women that fight them. Oh and California would not be in such a bind if Governator did not give us all back our Vehicle registration fee's. I for one would not have minded the state keeping it to help.

Posted by: USCITIZEN_04 | Jan 27, 2009 7:31:17 PM

Oh! Let's let these geniuses define the emissions standards for automobiles!

How can we lose!

Posted by: Ismail | Jan 27, 2009 7:32:00 PM

So, I always get a refund.
My wife always pays (she is self-employed).

If we file separately, can I ask California to... um... how should I put it... hmm... can I say... "my wife cannot pay you until you pay me..."

Posted by: tom | Jan 27, 2009 7:33:21 PM

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