The Oregon Employment Department will be implementing a new program for people who owe Overpayments of Unemployment Insurance due to fraud which may intercept all or part of their Federal Income Tax refunds in order to pay the debt. Under Federal Authority, 16,550 notices have been sent to people who collectively owe $55 million due to alleged Unemployment Insurance fraud. The notices give 60 days to make payment or prove that they do not owe the money or else the debt is referred to the US Department of the Treasury for collection.
This new authority gives Oregon a powerful method to recover monies that were obtained fraudulently and return them to the Unemployment Insurance Trust Fund, where they can rightly serve struggling Oregonians who are unemployed through no fault of their own.
Returning money to the Trust Fund also benefits employers as it is the employers that fund it.
Notices and statements have been mailed to claimants who owe the Unemployment Insurance program for benefits fraudulently collected. Some of these debts are 10 years old.
The debt is legally enforceable and claimants have 60 days to make payment or submit evidence that proves they do not owe the money. Such evidence might include proof that:
The debt was discharged in Bankruptcy court
The debt is already paid in full.
The Social Security Number (SSN) on file is not their SSN, so they are not the debtor.
If the amount received within the 60-day timeline does not satisfy the debt, or the claimant does not respond with sufficient evidence disputing the debt, it will be referred to the Treasury Department to begin the Federal Tax intercept process.
Currently, the Oregon Employment Department does send debts owed to the Oregon Department of Revenue to intercept State Tax refunds. This is an additional step in the many actions that the Department of Labor is taking to prevent, detect and recoup overpayments. Federal Legislation passed in 2008 directed the US Department of the Treasury to assist the US Department of Labor (USDOL) and the states to recover unemployment benefits, improperly paid due to fraud/unreported earnings, from federal income tax returns. USDOL recently issued the required guidance to states. Tax year 2013 will be the first year the Oregon Employment Department is recouping Overpayments from federal tax refunds under the new Treasury Offset Program (TOP).
Those who have questions about their outstanding debt should contact the Overpayment Recovery Unit at 1-800-553-5396.