If you owe more than $25 in property taxes, the county will now intercept your state tax refund to pay your debt.
Boone County Treasurer Debbie Ottinger said the program, called the Tax Refund Exchange and Compliance System, or TRECS, is offered as a service by the Indiana Association of Counties (IAC). Boone County will participate for the first time this year.
Current code allows state agencies and local governments to submit debts against tax refunds. A list of delinquent property owners is given to IAC. A letter is sent to every person on the list alerting them to the intercept and allowing them to pay off the debt and penalty. Sometimes it’s a debt they may not even be aware of.
“When your mortgage company has been paying your taxes for years and you pay off a mortgage and you no longer have that,” Ottinger said. “If you pay that off after spring taxes are due, you may forget that it is your responsibility to pay the fall (installment). That can happen very easily.”
If not paid, the program intercepts the state tax refund to pay off the debt, plus a penalty of 10%. The taxpayer will not see a refund. If the debt is more than the refund, the entire refund is intercepted but the remaining debt continues.
The intercept is tied to a Social Security number. If a business entity owns the property, they will not be affected. The owner’s name must be listed on the tax bill.
The IAC, as the clearinghouse, is authorized by law to charge $20 to the total owed and collects that fee. The Indiana Department of Revenue will charge the delinquent taxpayer 15% of the amount owed.
Although there is very little work for the staff of the treasurer’s office, Ottinger said the program will be on a trial basis to see how well it works.
“If this were to help offset any delinquent taxes,” Ottinger said, “and that would keep them off of the tax sale, then we look at this as a good program.”
Only state taxes are affected. The program cannot intercept federal refunds.