Long wait times, no answers: Workers frustrated after Ohio withholds tax refunds over unemployment claims

COLUMBUS, Ohio — Sharon Ganoe said she is literally paying for someone else’s crime.

The Springfield Township resident said the Ohio Department of Taxation withheld her 2023 tax refund to offset a debt from a fraudulent unemployment claim filed in her name.

“I’m paying on a debt that somebody else accrued,” she said. “And they did it fraudulently.”

Despite spending hours on hold with three different state agencies, she said she has been unable to reach anyone who can help her.

“I just wonder if anybody is even really working there,” she said.

How it started

Ganoe said she and her husband, Barry, received an Offset Notice from the Ohio Department of Taxation in February. It said the agency was considering withholding their tax refund to offset their debt.

“We’re like, ‘What?!’ because we weren’t aware of any money that we owed,” she said.

After making several phone calls, Ganoe said she learned her identity was stolen. She said a crook filed an unemployment claim during the pandemic using her previous name and an old address.

Ganoe said she then filed a fraud claim with the Ohio Department of Jobs and Family Services, reported it to OH|ID, and made more calls to state agencies in an attempt to receive her refund.

“This has become a project for me,” she said. “One that I don’t want.”

But it didn’t work. Ohio kept their refund.

“It infuriates me that they wouldn’t listen to me,” she said.

How it happened

“The agency is not doing a good enough job to identify where is fraud really taking place,” Zach Schiller said. Schiller is the research director for Policy Matters Ohio, a nonpartisan, nonprofit research institute.

He has researched and written about problems with Ohio’s outdated and underfunded unemployment system for two decades.

I first talked to Schiller in January after a Parma business owner was told to back his pandemic benefits.

Ohio says Parma business owner has to pay back $26,000 in pandemic benefits because of missed deadline

Ohio says Parma business owner has to pay back pandemic benefits

“The Ohio Department of Job and Family Services is not sufficiently funded to support the level of service that Ohioans deserve and need,” he said.

Schiller said efforts have been made to modernize the state’s system, but it still falls short of what is needed to provide adequate customer service.

“We are not in a pandemic, we’re not in a high unemployment situation,” he said. “So why can’t the agency answer phone calls in a timely manner?”

ODJFS Director of Communications Bill Teets said the state is working to improve customer service, including reducing wait times.

He sent us the following statement:

He said the state has created a callback feature so callers do not need to wait on hold. Currently, the average time for a callback is 4 hours, according to ODJFS.

He also encouraged workers to use the ODJFS Unemployment website to find answers to their questions.

How it’s going

So, how many Ohio taxpayers’ refunds are being withheld in connection with unemployment claims?

In an e-mail, an Ohio Department of Taxation spokesperson wrote that the agency withheld 248,262 tax refunds this year.

In another e-mail, an ODJFS spokesperson wrote that “as of May 9, 2024, ODJFS has 465,814 cases in active debt collections with the Ohio Attorney General since March 2020.”

But no one we talked to with the Ohio Department of Taxation, Ohio Attorney General’s Office, or Ohio Department of Jobs and Family Services answered our questions about the number of tax refunds withheld in connection with unemployment claims this year.

However, ODJFS Public Information Program Administrator Tom Betti provided us with the following timeline on unemployment overpayment appeals and the collection process:

• ODJFS discovers a claimant may not be eligible for a previously paid week.
• ODJFS contacts the claimant and requests information specific to their eligibility and weeks.  Claimants are notified that they have five days to respond to our requests.
• If there is no response, or the information provided establishes the claimant was not eligible for unemployment benefits, ODJFS issues a Determination of Unemployment Compensation Benefits (Determination), which spells out the ineligibility issue in question, the week(s) of ineligibility, any associated overpayments, and any penalties for fraud.
• The Determination also provides information for repayment, as well as outstanding debt referred to the Ohio Attorney General’s Office for collection, which may include state and federal income tax withholding.
• The Determination also provides information on appeal rights, how to appeal, and deadlines to appeal (21 calendar days after the date issued).
• ODJFS has 21 days to review an appeal and issue a Directors Redetermination (Redetermination).  The Redetermination provides the appellant with the decision and reasoning, repayment information, and appeal rights, how to appeal, and deadlines to appeal (21 calendar days after the date issued).
• Appeals to Redeterminations are transferred to the Unemployment Compensation Review Commission (UCRC), and a hearing is scheduled.  The UCRC has 21 days to review an appeal, conduct a hearing, and issue a decision.  The Hearing decision includes the details of the ineligibility issue, the weeks, and repayment amounts and methods.  It also includes information on appeal rights, how to appeal, and deadlines to appeal (21 calendar days after the date issued).
• Appeals to UCRC decisions, or Requests for Review, are reviewed by the full Unemployment Compensation Review Commission, and a decision is issued to the appellant, which includes appeal rights, methods, and deadlines (30 calendar days after the date issued).
• Appeals to Requests for Review should be filed with the county common pleas court where the claimant lives or was employed.
• Determinations and Decisions become final once applicable appeal deadlines have expired.
• Once a Determination or Decision becomes final, all associated debt becomes collectible. ODJFS takes collection action through the Determination repayment language and overpayment notices.
• All associated outstanding debt is certified to the Ohio Attorney General (OAG) for collection after 66 days. The OAG has various collection methods, including mail/phone outreach, third-party collectors, and special council, as well as offsets to state income tax refunds, Ohio lottery, and Ohio casino/racinos.

“There’s a lack of inter-agency communication,” Barry Ganoe, Sharon’s husband, said. “The left hand doesn’t know what the right hand is doing.”
Ganoe said the state should have figured out the fraudulent claim filed in his wife’s previous name was fraudulent.

After all, he noted, she changed her name to Ganoe when they got married in 2014.

Their refund was only $411. But Sharon won’t give up on getting her money back.

“I’m afraid somewhere in the future they’ll send us another letter saying we owe $20,000 dollars or something,” she said. “Plus, the fact it’s not right.”

News 5 Investigators have reported on problems with Ohio’s unemployment system since the pandemic started.

ODJFS said it identified approximately $6.9 billion in fraud and non-fraudulent overpayments during the pandemic.

This is not the first time efforts to reclaim those funds and reduce fraud have led to problems for Ohio workers. Last summer, I revealed some Ohio workers were temporarily locked out of their accounts in an effort to prevent fraud.

Unemployed Ohio workers temporarily locked out of accounts

Unemployed Ohio workers locked out of accounts

I requested an interview with ODJFS Director Matt Damschroder for this report but was told he was unavailable.