Tax season lets D.C. collect $2.5 million in unpaid tickets

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Local,DC,Alan Blinder,Taxes

After turning to an old tactic with expanded reach to pursue unpaid debts, the District government said Friday that it had seized nearly $2.5 million from residents with unpaid parking and traffic tickets by garnishing their tax refunds.

Chief Financial Officer Natwar Gandhi's office said that the District had raked in $2,464,023.63 in "offsets" tied to the D.C. Department of Motor Vehicles by the end of Thursday, three days after the filing deadline for District income taxes.

"There has been a filing season surge at the deadline," said David Umansky, a spokesman for Gandhi. "We should see another day or two of elevated numbers."

Money continued to pour into the District's coffers even after the filing deadline. Data from Gandhi's office showed that on Thursday, the District collected nearly $112,000 from 464 residents.

But they represented only a fraction of residents affected by the DMV garnishments. Gandhi's office said the Office of Tax and Revenue had seized refunds from more than 9,300 residents throughout the tax cycle, making the average garnishment nearly $265.

The 2013 tax season marked the first time that the District could reduce or eliminate refunds for residents with unpaid traffic and parking tickets, a program expansion that Gandhi had predicted would give the city an extra $2.5 million in income.

The city had previously been able to seize refunds for defaults on federal student loans, debts to the federal Internal Revenue Service, overdue child support and overpayments of unemployment benefits.

Gandhi's office said that by the end of March, the city had collected about $2.5 million in refunds to satisfy those debts.

Although the broadened plan to target traffic scofflaws received widespread legislative support, a top lawmaker voiced concerns last month that communication errors among D.C. agencies could lead to trouble for taxpayers.

"Our government is not very good at spending money wisely and perhaps too good at collecting money," Ward 2 Councilman Jack Evans said in March. "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."

He cautioned that the program was "a potential minefield of administrative errors that will be tough to untangle."

Evans, who chairs the council panel with oversight of Gandhi's office, said Friday that his worries had receded and that he was pleased with the influx of cash.

"It's always good to have extra money," Evans said. "We have things to spend it on, that's for sure."

ablinder@washingtonexaminer.com

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Alan Blinder

Staff Reporter, D.C. City Hall
The Washington Examiner