State can intercept tax refunds of residents who owe the state money

February 14, 2014 at 12:02a.m.

COLUMBUS

Ohioans who illegally obtained unemployment benefits probably aren’t going to be receiving hefty tax-refund checks this year.

That’s because of a new effort that will allow the Ohio Department of Job and Family Services to intercept federal tax refunds headed to residents who owe the state due to fraudulent payments.

ODJFS announced the Treasury Offset Program on Thursday.

The program “will allow us to collect tens of millions of dollars in outstanding fraud debt more quickly and efficiently,” Cynthia Dungey, the agency’s director, said in a released statement. “New York and Illinois each intercepted more than $26 million during the first year of the program. We expect similar results ... in Ohio.”

ODJFS already snags state tax refunds and lottery winnings from residents who received unemployment compensation illegally — often those who returned to work but continued to collect benefits.

The agency reported about $40 million in outstanding debt from state unemployment payments and $30 million in outstanding debt from federal benefits owed as a result of such fraudulent activities.

According to ODJFS spokesman Ben Johnson, perpetrators are notified when unemployment fraud is confirmed and told that tax refunds could be seized if benefits are not repaid.

The IRS also notifies residents when their refunds are redirected to the state.