Every year, tens of thousands of people, many of them Alaskans, apply for Permanent Fund Dividends to which they’re not entitled.

In recent years, more than 25,000 ineligible applicants have sought dividends, according the Department of Revenue’s Dividend Division.

That’s OK, said Debbie Bitney, director of the division.

“We encourage everyone to apply so we can determine their eligibility,” she said. “We don’t want people trying to determine their eligibility themselves.”

She acknowledges the state’s rules are complicated, and said her division staff can best sort out who is eligible and who is not, without the erroneous denials that might come from applicants trying to figure them out themselves.

But with $760 million in payments at stake, sometimes it is a case of people trying to get payments to which they know they’re not entitled.

In a small number of cases, 10 in 2010, applicants were prosecuted for providing applications they knew were false.

When applications arrive in Juneau, whether online, by mail or by hand, Bitney’s staff reviews them for possible problems.

That can include an out-of-state IP address, notification from the U.S. Postal Service the person has moved out of state or other reasons. Most of the applications that get the extra screening, though, are eventually approved.

There are numerous reasons someone could be applying from outside the state or even the country and still be eligible, such as being in college or the military or accompanying someone who was eligible.

Some of the applications are denied, though there is an appeals process, but others are referred to the Department of Revenue’s Criminal Investigations Team. That group handles tax fraud, gaming investigations and a variety of cases.

It has three investigators dedicated to dividend applications, but manager Scott Stair said they can draw on other staff during particularly busy periods.

“We take every complaint we get very seriously, some of them have merit and some don’t,” Stair said.

Last year, fraud investigations were triggered in part by referrals from the division or other government agencies, but many from the public as well.

“We really love to get our fraud tips. In my opinion, they’re our best resource” for finding people trying to defraud Alaskans, he said.

Dividend payments are based on a set amount of Permanent Fund earnings, divided by the number of eligible applicants each year. That means that fraudulent applications diminish every other dividend payment.

Stair described the tips they get as a “mixed bag,” but last year 187 tips from the public led to dividends being denied, and in some cases past dividends being forfeited as well.

That meant about $213,000 slated to go back to those who deserve it, thanks to public tips.

Sometimes someone brags about getting a dividend to which they’re not entitled to a friend, and then has a falling out.

“Somebody was mad at somebody, and we’ll get a call saying, ‘Guess what I know,’” Stair said.

Another 230 dividends were denied due to fraud tips from government agencies last year, meaning at total of $550,000 went into the divided checks of those who deserved it, rather than those who didn’t.

Contact reporter Pat Forgey at 523-2250 or at patrick.forgey@juneauempire.com.