It can be tempting to crumple up and toss a parking ticket but throwing it away doesn’t make it go away. Parking authorities hold onto their copies of those tickets and those who don’t pay immediately pay up eventually – often through offsets.
Just ask Michael Gardner. His state tax refund was garnished by 80% this year for nearly $200 in parking tickets payable to the city of Inglewood, California. There’s just one problem. Gardner has never been to Inglewood. Nor does he own the Honda ticketed in Inglewood, saying, “I never owned a Honda in my life.” Instead, he owns a PT Cruiser that he’s driven for the past 9 years.
He thought that a quick chat with the California State Franchise Tax Board would straighten the situation out. He was told he would have to wait up to four months to get his money back. It turns out that he got it back in just two weeks (maybe a little publicity from CBS13 helped). But Gardner’s experience highlights the helplessness that taxpayers feel when they’re targeted for offsets, especially if the offset is wrong.
Offsets refer to money seized by the federal, state or local government to satisfy debts. The ability of the authorities to seize your funds is set by statute and varies when it comes to states and municipalities. However, the law is clear that if you owe money to the federal government, your federal income tax refund can be seized to satisfy your debt as part of the Treasury Offset Program (TOP). Examples of debts that might trigger offsets include federal income tax delinquencies and student loan defaults. Under TOP, states may enter into agreements with the Internal Revenue Service (IRS) to intercept, or offset, federal tax refunds for state tax obligations or money owed to state agencies. This includes not only state tax delinquencies but matters such as child support arrears.
What’s supposed to happen is that you are notified in advance of any offset action to be taken. That’s true for federal obligations, as well as state and local obligations.
The California State Franchise Tax Board is required by law to send a written notice at least 30 days in advance before they seize your refund in order to give you time to contest the seizure if it’s not accurate. That didn’t happen to Gardner, who said, “I never got a notice. I read every piece of mail, even the junk mail.” The city of Inglewood says that a notice was sent – but it ended up at the wrong address due to an error.
While Gardner was frustrated, the California State Franchise Tax Board claims his experience is an anomaly, saying that they’ve garnished the wrong person’s taxes just four times in the last two years.
Gardner’s instinct – to contact the taxing authorities to resolve his dispute – was a good one. When it comes to state and local matters, you’ll want to reach out to those tax authorities directly. If you have concerns about seizure of a federal refund, you can call the TOP Call Center at 1.800.304.3107.
