State offset programs eating rebates

June 10, 2008

Remember my post about a month ago that examined why some folks’ rebate checks are showing up short or not at all? One of the main reasons is that the money was diverted as part of the U.S. Treasury offset program.

Through this special collection process, state tax departments and other government agencies can collect from federal tax refunds any money they say they are owed. The money comes out before the taxpayer ever sees a penny from the IRS.

Stimulus_rebate_2Well, as noted earlier, it applies to rebate checks, too.

Down in Georgia, tax collectors are being particularly aggressive this rebate season. By the end of May, the state had intercepted 16,000 federal stimulus checks from people who allegedly owe back Georgia taxes, producing a Peach State treasury windfall of more than $4.66 million.

And it’s looking for more. Georgia tax officials say the state’s list of tax delinquents covers 1,300 pages. That’s 36,000-plus people whom the state says owe it a combined $6 billion in back taxes.

As for the current economic stimulus payments, Georgia Public Broadcasting news reports that the state ranks third nationally for number of rebate seizures. (It doesn’t elaborate on which states have seized more; I’m still checking.)

In the five years that Georgia has participated in the federal offset program, according to GPB, the state has collected a total of $137 million in back taxes.

You can listen to a report on the offset program in general and the Georgia situation in particular at this National Public Radio Web page.

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