[Congressional Record (Bound Edition), Volume 149 (2003), Part 14]
[Extensions of Remarks]
[Page 19882]
[From the U.S. Government Publishing Office, www.gpo.gov]




      OFFSET OF FEDERAL TAX REFUNDS FOR STATE AND LOCAL TAX DEBTS

                                 ______
                                 

                          HON. JAMES P. MORAN

                              of virginia

                    in the house of representatives

                         Friday, July 25, 2003

  Mr. MORAN of Virginia. Mr. Speaker, I am pleased today to be 
introducing legislation that would establish a federal tax refund 
offset program for state and local governments. Specifically, this 
program would require the federal government to withhold refunds from 
those individuals and corporations that still owe state or local 
government tax obligations.
  Today, the reverse situation exists. A number of states allow their 
own state agencies, local governments and the Internal Revenue Service 
to submit a list of delinquent taxpayers. The state then matches these 
delinquent accounts against taxpayers who may qualify for a state tax 
refund. If a match is found, the state reduces the refund by the amount 
of the delinquency and remits the funds to the claimant. These programs 
have proven to be low-cost and highly effective. Congress recognized 
the effectiveness of these programs and directed the Internal Revenue 
Service to establish a similar program to cover claims by other federal 
agencies, as well as for past-due child support obligations. In 2000, 
Congress expanded the program by directing the Treasury Department to 
accept claims by states for income tax obligations.
  The legislation I am introducing today builds on these successful 
programs by permitting local governments to participate. The local 
governments could submit their outstanding tax debts to the Department 
of the Treasury for an offset against any federal tax refund, just as 
federal agencies and states do now. This legislation would also permit 
a claim to be made for any legally enforceable tax obligation owed to 
the state or local government.
  In an era of tight state and local government budgets, it is patently 
unfair to have the taxpaying citizenry bear the costs and burdens of 
those who do not pay their fair share. As President Kennedy recognized, 
``[t]o the extent that some people are dishonest or careless in their 
dealings with the government, the majority is forced to carry a heavier 
tax burden.'' (April 20, 1961) The legislation that I am introducing 
today will provide a means to help distribute that burden more 
equitably.
  I urge my colleagues to support it.

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