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New weapon in tax collection arsenal

January 8, 2013

Tax Assessor Christopher Celeste said written notifications have already been sent to 4,000 individuals to alert them that their 2012 tax returns are at risk. (Photo/Ernest A. Brown)

WOONSOCKET – Woonsocket has hopped on the bandwagon of a new and little known state law that has already enabled East Providence to collect millions in previously delinquent property taxes by intercepting state income tax refunds.
It’s called the Tax Refund Offset Program, and it works like this: If you’re running a sizeable enough delinquency with the city on real estate, motor vehicle or business equipment taxes, the state Department of Revenue will capture funds from your Rhode Island income tax return this year so they can be applied to the city debt.
Tax Assessor Christopher Celeste said written notifications have already been sent to 4,000 individuals to alert them that their 2012 tax returns are at risk. The net included anyone with a delinquency of at least $100 in either principal or interest payments.
The collective delinquency represents a sum of roughly $15 million, though Celeste says most of it has been on the books so long it is almost certainly out of reach by any means.
But some of the debt is collectible, says Celeste. The question for the tax assessor of this cash-strapped city is, how much?
“It should be a good chunk,” says Celeste. “This is the first time we’ve ever done this, so we don’t know, but whatever the figure turns out to be is going to be a plus.”
To employ this new collection technique, the city simply cross-references its delinquent account information with recipients of state refund checks to look for matches.
The city is acting under a section of state law that used to restrict the DOR to intercepting tax returns to cover unpaid child support payments or court processing fees.

Read more in our print edition.

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