IRS seeks $15 million in back taxes from Permanent Fund Dividends

Posted: Tuesday, October 03, 2000

ANCHORAGE (AP) -- After keeping a low profile for the past few years, the Internal Revenue Service is, once again, going after its share of the Permanent Fund Dividend in a big way.

The agency is seeking more than $15 million from 10,500 Alaskans in line to receive the record $1,963.86 dividend from the state's oil wealth savings account this month, said Judy Monahan, IRS spokeswoman in Seattle.

That's a sharp increase from last year, when the agency pursued the dividends of just 70 Alaskans who owed back taxes.

A combination of factors led the IRS to sharply curtail its Permanent Fund Dividend garnishment efforts in the past couple of years.

In 1997, the agency erroneously sent out notices to hundreds of Alaskans saying it would seek a portion of their dividend checks. Some of those who received the letters owed only a few cents. IRS officials blamed a computer problem for the error and halted dividend collection efforts that year while it worked to correct the problem.

During the past two years, the agency has been trying to figure out how to operate under a 1998 law that overhauled the agency and gave taxpayers broad new rights. The new law was intended to make the IRS fairer and more responsive to taxpayer complaints.

''We were in a transition period and had to update the processes and make sure we complied with the new law,'' Monahan said.

With that transition now complete, the agency is again eyeing the dividends of Alaska's delinquent taxpayers. Those who owe the IRS money have already been notified of the agency's intent to pursue their dividend.

''Actually, 518 people as of September 1st have come to pay in full. There are some who have decided to ask for an appeals process,'' Monahan said. Those who owe money can work out an installment payment schedule with the agency or seek a hardship determination if they are unable to pay.

The agency is giving a break to those Alaska residents affected by the salmon disaster on the Yukon and Kuskokwim Rivers and in Norton Sound.

''What we did was we looked up the status of each account in the disaster zip code areas. We levied the dividends only if it was determined that the taxpayer would not suffer a hardship. It was exclusive to those areas,'' Monahan said.

Alaskans whose dividends are reduced for debt payments shouldn't assume that it's the IRS that has taken their money, she said.

The IRS is just one agency that will seek payment from this year's dividend. The federal bankruptcy court is first in line, followed by the Alaska Child Support Enforcement Division, state student loan agencies, other state agencies and the IRS.

Monahan said those who have questions about the agency's dividend garnishment efforts should contact the agency's taxpayer advocate in Anchorage at 907-271-6877.

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