State will seize tax refunds for unemployment frauds

The Washington State Employment Security Department plans to notify more than 25,000 people that their 2012 income-tax refunds may be intercepted to repay benefits they shouldn’t have received.

The department was recently approved to participate in the federal Treasury Offset Program, which allows state officials to cross-match their computer files with the Internal Revenue Service and flag individuals who are delinquent in paying back overpayments of benefits.

Generally, the state will have first claim on any refunds those individuals might receive, according to the department.

“We place a high priority on protecting the unemployment trust fund for those who are eligible for unemployment benefits,” said Employment Security Commissioner Paul Trause, in a press release. “We also want to protect employers from potential rate increases caused by inappropriate benefit claims.”

Many people targeted for federal review claimed unemployment benefits fraudulently.

Federal law also allows states to recover benefits from people who didn’t disclose earnings they received while claiming benefits.

The Employment Security Department will intercept refunds only for individuals who are past due in repaying what they owe.

Together, the 25,000 people receiving notices owe $61.7 million in delinquent debt to the department.

A year from now, employers with delinquent taxes will be added to Washington’s Treasury Offset Program, review, in time for filing 2013 tax returns.

Washington is one of 18 states, plus the District of Columbia, currently approved to participate in the program.

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