Unemployment fraudsters risk loss of tax refunds

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If you’ve been wrongly receiving unemployment benefits, the state Employment Security Department may be coming after your income tax refund.

This week the agency has been notifying more than 25,000 people that their 2012 income tax refunds may be intercepted to pay back wrongly claimed benefits.

“We place a high priority on protecting the unemployment trust fund for those who are eligible for unemployment benefits,” Employment Security Commissioner Paul Trause said in an announcement. “We also want to protect employers from potential rate increases caused by inappropriate benefit claims.”

The employment department was recently approved to participate in the federal Treasury Offset Program, allowing it to cross-match its computer files with the Internal Revenue Service and flag those who are delinquent in paying back benefit overpayments.

Many of those targeted for review claimed unemployment benefits fraudulently, according to the agency. Employment Security will intercept refunds only for those who are past due in repaying what they owe. The 25,000 people receiving notices this week owe a collective $61.7 million in delinquent debt.

A year from now, employers with delinquent taxes will be added to Washington’s Treasury Offset Program review, in time for filing 2013 tax returns. Washington is one of 18 states, plus the District of Columbia, currently approved to participate in the Treasury Offset Program.

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