Monday, December 01, 2008

Probation department warns state tax refund can vanish

By EMILIE RAGUSO
eraguso@modbee.com

last updated: February 19, 2008 03:59:42 AM

With the specter of the tax collector looming, some local crime victims are reaping redress because of a program that can confiscate state tax refunds from past and present probationers who owe money.

Larry Melton got a check in early February for almost $25,000.

"It's a great thing the probation department has done," the 59-year-old Modestan said. "Without it, I never would have gotten the check."

In the late '90s, Melton's secretary embezzled tens of thousands of dollars from him, he said. For several years, she made restitution payments as ordered by the Stanislaus County Probation Department. But the money tapered off when she completed her five-year probation.

"It was kinda like shutting the switch off," Melton said. "One or two checks did drift in somewhere. A year goes by, there was $100. The next year, $200."

Then, in November, his former secretary was one of nearly 13,000 people in the county to whom the probation department sent a foreboding letter.

"Our records show that you have a delinquent debt ...," the letter reads. "You have 30 days to voluntarily pay this amount before we submit your account to the Franchise Tax Board (FTB) for interagency intercept collections."

Soon afterward, the former secretary, who hadn't made a payment in two years, called the probation department, according to Chief Probation Officer Jerry Powers.

"She called our accounting office and asked how to avoid us taking her tax returns," he said. "We told her she could pay the money."

And pay the money she did. The accounting department received the check in December and delivered a payment recently to Melton's attorney.

"Most people fear the tax man more than they fear the police man," said Powers. "The bottom line is we attempt to get victim restitution using all legal avenues available to us. We aren't always as successful as victims or we would like, but programs like the tax intercept program are one of our most effective methods of recovering money."

More than $1 billion brought in

Californians with delinquent loans have been subject to tax refund interception since 1975. The statewide effort, called the Interagency Intercept Collections program, has brought in more than a billion dollars statewide that might not have been collected otherwise, according to the Franchise Tax Board.

In 2004, the board intercepted $142.2 million on behalf of 224 agencies throughout the state. The money intercepted includes lottery winnings and goes to pay child support, outstanding property taxes, college debts and restitution.

Of the roughly 7,500 adults and 750 juveniles on probation in Stanislaus County, about 3,200 owe restitution totaling nearly $14 million, according to pro- bation department accountant Vicki Martin.

Restitution can cover damage to a vehicle, counseling after a traumatic attack or funeral costs, deputy probation officer Victoria Gibson said. It may be ordered by the court as part of a criminal sentence. After sentencing, the victim fills out a form to describe what kind of restitution would be fair. The defendant can agree to the request or contest it.

"Most of them do agree with the damages claimed," Gibson said. "You show them the bill or the receipt, and they say, 'OK.' "

When the system works, defendants pay off the restitution all at once or through a payment plan in which they agree to give a certain amount monthly. They can pay in person, by mail or through automatic credit card payments. Restitution does not accrue interest.

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