Midyear Meeting

States Should Recover Debts from Federal Tax Refunds, ABA Says


The federal tax code should be amended to let “states recover overdue debts due to them, including court-ordered victims’ restitution, fines, fees and costs, by intercepting federal tax refunds that are due to the non-indigent debtors who owe the debts to the state,” the ABA policymaking House of Delegates said Monday.

According to the report (PDF) in support of Resolution 10B (PDF), the National Center for State Courts estimates that there is $15 billion in such debt that could be collected. Many states already intercept state tax refunds and lottery winnings for this purpose.

The U.S. Department of the Treasury can already intercept tax refunds for child support debt, state and federal taxes, and federal-agency debt, but not for the collection of court-ordered fines, fees and restitution.

The measure passed the House on an overwhelming voice vote. No one spoke in opposition.

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