Indiana Counties Now Siezing Tax Refunds For Unpaid Property Taxes

If you’re delinquent on your property taxes then don’t expect your tax refund check to make it to your bank account.

Many Indiana county governments are taking advantage of the new law that passed quietly last year.

Here’s more from

The authority to withhold state refunds from property owners who owe a minimum of $25 came last April after the passage of Senate Bill 515 by the Indiana General Assembly. That vote led to the creation of the Tax Refund and Compliance System.

Lawrence County Treasurer Paul Stewart says TREC is a debt set-off clearinghouse program to allow local units of government to easily and efficiently collect delinquent debt.

“Lawrence County is part of a pilot program,” says Stewart. “Since the debtor is charged related collection fees, there is no cost to the county to register or participate other than to notify the delinquent property owner.”

It offers an automated data export exchange between counties and the clearinghouse, with a similar back-end data import feature to update county financial records. The association administers TREC under a Memorandum of Understanding with the Indiana Department of Revenue, according to the Association of Indiana Counties website.

Stewart told the commissioners, the TREC program is favorable to delinquent property owners because it:

  • Lowers credit-rating impacts.
  • Uses notification letters that allows the property owner 30 days to contest the decision.
  • Provides an appeals process regarding essential expenses, including medical bills.

While the TREC program applies to anything owned by an individual – tax refunds provided to corporations, limited liability business and partnerships are currently not eligible for intercept.

The county treasurer will have the responsibility of keeping all payment records updated on the treasurer’s office, and collect Social Security numbers – something Indiana counties do not currently do with property taxes.

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