Personal Injury Law

State Holds Tax Refunds To Collect Overdue Court Fines And Fees

By Steve Lombardi

Des Moines, April 14, 2008 - Not everyone will get the Iowa income tax refund they expect this year.  Some Iowans may get a letter from the Department of Revenue and Finance stating that part or all of their state income tax refund is being withheld to pay their overdue fines, fees, and other court debts. 

According to court officials, this procedure, known as income tax offset, is an effective tool for collecting unpaid fines and fees.  So far this year, the state has collected $1.9 million using this process.  Last year, the courts collected nearly $4 million through the income tax offsets.  

In Dickinson County, Clerk of Court Marcia Eckerman says her office regularly receives complaints about income tax offset letters this time of year.  

"Many of them tell me that there should be a statute of limitation on their old fines," Eckerman said. "But, of course, there isn't. Many of the same people call several times to make sure everything is resolved before tax time. It's very effective. We collect a lot of old fines with it, but we also get a lot of unhappy phone calls." 

During March and April, Eckerman's office has received about $20,500 from income tax offsets for unpaid fines and fees. 

Cass County Clerk of Court Sheila Kunze says her office receives numerous telephone calls from people who are angry about having their refund withheld. 

"They call and say, 'Hey, you've got my income tax return,'" Kunze said. "They're upset at first, but once we pull the file and read the original fine or charge they usually take care of it so they can get their whole refund back." 

Clinton County Clerk of Court Marilyn Huff, whose office has collected $60,000 from the tax offset so far this year, said her staff searches through decades old case files to unearth unpaid fines that predate the state computer system. 

 "Some of those debts are 20 to 25 years old," Huff said. "They include traffic tickets, criminal cases, simple misdemeanors, and civil infractions. We've had some adults come in and pay for under-age drinking or curfew violation fines they owe from when they were kids." 

So far this year, Mahaska County has collected $38,834.50 from the tax offset. Mahaska County Clerk of Court Mary Sexton likes the process because there is little room for dispute. 

"It is really an effective way to collect fines because it is all automatic," Sexton said. "There is not a lot people can argue about with when they call. They usually just pay the fine." 

In addition to income tax offset, state and local officials use a variety of ways to collect unpaid fines and fees.  Judges and magistrates use contempt hearings, clerks send several warning notices to defendants, the DOT suspends licenses, county treasurers withhold vehicle registration and a number of county attorneys pursue delinquent fines and fees.  Despite all these efforts, the amount of unpaid court debt continues to accrue and increase year after year. Most of the debt is in the form of criminal judgments and the courts, unlike businesses, cannot write off these debts.  Court officials say that the total statewide unpaid debt now totals approximately $475,998,360. 

"Collecting unpaid fines and fees from scofflaws is a constant uphill battle," State Court Administrator David Boyd said.  "Court employees, judges and others work diligently year round to pursue these debts, but every year at this time I am reminded of how effective the tax offset is in the collection process."

Full post as published by Des Moines Personal Injury Lawyer on April 14, 2008 (boomark / email).