Kathy Waterbury, government affairs and communications director for the MDOR, said the biggest reason for the setback is the department's small staff size.
"Right now we've issued about 80 percent — over 650,000 returns," said Waterbury. "We're about three-to-four weeks behind.
"We're a little bit behind because there aren't enough people to do the job. We've been asking for additional staff and the legislature was able to provide us with 21 new potions as of July 1."
Waterbury said the new employees would be a welcomed addition, but unfortunately they will not assist with refund checks until the 2013 tax year.
Waterbury added that the outstanding refunds are being held up for different reasons, most commonly to check for verifications, validations and precautions against fraud.
"The refunds remaining require someone to look at them, but this does not mean they are all fraudulent," she said. "Most errors come up when social security numbers are wrong or someone accidently left out information.
"We are working as fast and as diligently as we can. Our staff is working weekends and overtime. Without enough bodies, we need to."
The MDOR launched a completely new integrated tax and revenue system last year called MARS, Mississippi Automated Revenue Systems, but Waterbury said this is not the reason for the tardiness.
"This is not the problem. Last year were able to prevent $10 million in fraud because of the system. That's real money that goes into schools, highways or elsewhere."
The system is designed to enhance customer service, increase the security and accuracy of taxpayer data and significantly improve business processes and operational efficiencies.
"We don't like the delay any more than the citizens do and obviously we don't want to see anyone upset," she added. "It's a big frustration for us also.
"At the same time, we have a responsibility to not send our tax money to fraudulent criminals. We're trying to preserve and protect the state's revenue."
The MDR also fell behind schedule with the 2011 refunds after computer hardware and server problems slowed down the process significantly.