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D.C. seizes $1.7m in tax refunds for unpaid tickets, debts

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Photo - "Our government is not very good at spending money wisely, and perhaps too good at collecting money," Ward 2 D.C. Councilman Jack Evans said in a constituent newsletter. "While I don't doubt the ability of the Office of Tax and Revenue to collect the revenue, I am concerned agency information sharing may result in over-collection."
"Our government is not very good at spending money wisely, and perhaps too good at collecting money," Ward 2 D.C. Councilman Jack Evans said in a constituent newsletter. "While I don't doubt the ability of the Office of Tax and Revenue to collect the revenue, I am concerned agency information sharing may result in over-collection."
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The District has garnished about $1.7 million this year in tax refunds from residents with outstanding debts to the city, including unpaid traffic tickets and belated child support.

According to figures from the District's chief financial officer, the city had collected $1,693,486.15 through Thursday in what the government officially describes as "offsets" from the 2012 tax year.

The garnishments have affected more than 6,700 residents, and that number is expected to climb as more file their tax returns. The city expects to rake in several hundred thousand dollars more before the this year's tax filing season ends.

Mounting an appeal
If motorists have questions about a refund garnishment tied to unpaid tickets, they should call 202-737-4404 within 30 days of receiving the offset notice from the District.

But as the city hauls in the cash from the offsets -- on one day last week, it took in $52,428.55 from 152 residents -- a D.C. lawmaker is raising questions about whether the District is at risk for collecting too much.

"Our government is not very good at spending money wisely, and perhaps too good at collecting money," Ward 2 D.C. Councilman Jack Evans said in a constituent newsletter. "While I don't doubt the ability of the Office of Tax and Revenue to collect the revenue, I am concerned agency information sharing may result in over-collection."

Evans described the initiative as "a potential minefield of administrative errors that will be tough to untangle."

But David Umansky, a spokesman for D.C. CFO Natwar Gandhi, said Evans should not be worried about a communications breakdown between the tax office and the D.C. Department of Motor Vehicles.

"The chances of 'overcollection' are remote," Umansky told The Washington Examiner. "That is because the DMV liability file is updated on a daily basis. All of the liabilities are at least 120 days old, so the taxpayer has had some time to make a payment."

And he said the District is prepared to return money to taxpayers who may have their refunds incorrectly garnished.

"In the rare situation where an offset takes place at precisely the same moment that the taxpayer is paying the ticket directly, a refund from DMV is available," Umansky said.

This is the first year the District is reducing tax refunds to collect on unpaid traffic and parking tickets, though the city has previously trimmed refunds in response to overdue child support, defaults on federal student loans, overpayments of unemployment benefits and debts to the Internal Revenue Service.

Gandhi has predicted the offsets could ultimately bring in $2.5 million to the District's coffers every year.

Gandhi's office said residents whose refunds are decreased through offsets will be notified by mail and have the opportunity to appeal.

Ward 3 Councilwoman Mary Cheh said she was certain the program would be a boon to the District, and she believed it remained appropriate.

"If they owe money to us, we ought to be able to have an offset," Cheh said.

ablinder@washingtonexaminer.com

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