SUMMERVILLE, SC (WCSC) - A Summerville woman says the State Department of Revenue mistakenly withheld part of her refund, after money was wrongly deducted for an unpaid debt that she never owed.
Mary Lowery says a "Notice of Adjustment" came in the mail from the DOR. She looked closely and realized the unpaid debt wasn't hers and the money was deducted from her state tax refund without her knowledge.
"South Carolina taxpayers need to know about this collection practice. I had no idea," Lowery said.
The notice said $381.71 was taken from her state tax refund for an unpaid bill and an administrative fee, paid to Timmonsville, a small town miles from home.
"My first thought was what is that? Where is that? I'd never heard of it before. I knew I didn't owe any money there. Then I was also surprised to learn it had been taken from my state tax refund," Lowery said.
Tax experts say a state law known as the "Setoff Debt Collection Act" allows local governments to work with the DOR to seize the unpaid money through the debtor's tax refund.
Tax preparer Deborah Fields says people with debt are matched with the DOR using social security numbers and mistakes can happen.
"You need to really research it and make sure it's your bill before you say okay i'm not going to worry about it. Any time you get a notice of adjustment you need to contact the person who gave you the notice of adjustment or your tax preparer," Fields said.
In Lowery's case, the Municipal Association of South Carolina, which works with the DOR, says human error lead to the mistaken deduction for the Timmonsville debt, and she got her full refund.
Lowery says had she not read the notice carefully and called Timmonsville and the Municipal Association, she would have been out nearly $400.
"My advice for South Carolina taxpayers is read all paperwork from the South Carolina Department of Revenue or IRS, question any adjustments. Sadly I think there are people out there who won't go through the trouble," Lowery said.
Lowery says it was a month before she finally received her full state tax refund.
The "Setoff Debt Collection Act" has been in effect since 2006. Tax expert Deborah Fields says the most common types of debt collected through this law include medical bills or back taxes.