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Thousands in Arizona have stimulus checks confiscated by Feds

The Associated Press

The Associated Press

PHOENIX – Thousands in Arizona have had their economic stimulus payments confiscated because of outstanding federal and state debts, government officials said.

The U.S. Department of the Treasury’s Financial Management Service has redirected 3,635 payments in Arizona totaling nearly $1.6 million to various federal and state agencies to cover debts such as federal and state tax liabilities, unpaid child support, delinquent student loans and other obligations.

“Basically if people owe a delinquent federal debt, more than 180 days old, the agency that the debt is owed to will refer the debt to us and we will make attempts to collect it,” said Tom Longnecker, legislative affairs specialist with the Financial Management Service.

For example, the Arizona Department of Revenue received 2,944 payments totaling more than $1.24 million from economic stimulus payments as of June 3, agency spokesman Dan Zemke said. Since May 2, the Department of Economic Security has received an estimated 2,437 payments totaling nearly $1.6 million from economic stimulus payments for unpaid child support, spokesman Fernando Vender said.

The Financial Management Service issues all checks for the Internal Revenue Service, and runs each one by its debtor database to see if the recipient has an outstanding debt, Longnecker said.

Income tax refunds usually present the biggest opportunity for debt collection. This year’s stimulus payments provide an additional collection opportunity. In most cases, it shouldn’t come as a surprise when taxpayers’ stimulus payments are confiscated, he said.

“If it’s been offset, we send them a letter saying your payment’s been offset,” Longnecker said. “In general, people who owe debt to the government know that they owe the debt because the agency has been trying to get the money from them.”

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