Employment Security recoups nearly $11 million from income-tax refunds - April 15, 2014
OLYMPIA – The Employment Security Department has collected more than $10.8 million in income-tax refunds over the past year without ever filing a tax return.
In early 2013, Employment Security began participating in the federal Treasury Offset Program (TOP), which allows the department to intercept income-tax refunds of people who claimed unemployment benefits erroneously.
The first disbursements from the Internal Revenue Service (IRS) began arriving March 2013, well into the tax season, but collections have escalated dramatically in 2014 as taxpayers submit tax returns for 2013 earnings.
TOP computers compare IRS files with records of delinquent debtors submitted by Employment Security. If there’s a match, the federal government reduces individual tax refunds by the amount owed to Employment Security – after paying late child support and other federal debts.
The money Employment Security got back over the past year came from overpayments to nearly 11,500 individuals who failed to report earned income or filed fraudulent claims.
“TOP is one way we make sure unemployment benefits go only to workers who earned them,” said Commissioner Dale Pienecke. “Getting the money back helps keep our benefits trust fund solvent and could protect employers from unnecessary tax increases.”
In 2013, Employment Security identified about $113 million in benefit overpayments and recouped $78.5 million. For comparison, the department paid about $1.8 billion in unemployment benefits last year.
Employment Security’s collections staff expects the federal offset program will increase the department’s overpayment collections to nearly $90 million this year.
Most benefit overpayments are a result of unintentional errors by claims filers. Only 1.1 percent of overpayments are due to fraud. By law, Employment Security must attempt to recoup benefit overpayments.
Beginning in late August, Employment Security plans to use TOP to collect debt from employers with delinquent taxes.
Employment Security is among at least 37 similar state agencies participating in TOP. The federal government launched the program in 2011.
Washington’s Employment Security Department is making good use of a new tool to recapture unemployment benefit overpayments.
The Treasury Offset Program allows the department to intercept income-tax refunds for people who are overdue in repaying benefits they should not have claimed.
These particular benefit overpayments resulted from fraud or failure to report earnings.
In the first year, Employment Security collected more than ten-point-eight million dollars owed on nearly eleven-thousand-five-hundred delinquent accounts.