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Moran Introduces Bill to Help Localities Collect Delinquent Taxes

Rep. Jim Moran's panel discussion on gun violence at Washington-Lee high schoolRep. Jim Moran (D-Va.) introduced a bill Monday that would allow localities like Arlington to recoup unpaid taxes with help from the federal government.

The bill would extend the Federal Offset Program to local governments. The program currently helps 42 states and Washington, D.C. to collect funds from delinquent taxpayers by reducing — or “offsetting” — their federal tax refund.

The bill, if passed, would be a triumph for Arlington Treasurer Frank O’Leary, who has advocated for such a tax-collecting tool on the local level.

“This is a win-win program for all levels of government and those who regularly pay their taxes,” O’Leary said in a press release. “Passage of this legislation could mean hundreds of millions of dollars of revenue for local governments without increasing the tax burden on those who faithfully pay their fair share of taxes.”

“This bill offers a unique opportunity not just to provide needed, owed funds, at no cost to the federal government, it also protects honest taxpayers from an increase in local property taxes,” Moran said. “The federal government has done this successfully with states and we should provide the same partnership to local governments looking for relief.” 

The federal government will collect a $25 fee from localities for each offset request. In Fiscal Year 2010, the Federal Offset Program collected more than $400 million in delinquent taxes to the states enrolled, Moran’s office said.

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