Ohio withholds Peninsula woman's tax refund, demands she pay back $28,000 in pandemic unemployment benefits

PENINSULA, Ohio — In February, Peninsula resident Jennifer Stancil received a notice in her mail that made no sense. With little information and a huge QR code, she thought the letter was junk mail or a scam. But before she tossed it aside, she looked more closely. It turned out to be from the Ohio Department of Taxation. It said Ohio was withholding her and her husband's 2023 tax refund to collect on a debt.

"It thought it was a mistake," she said. "It has to be a mistake."

Before she could figure out what happened, another letter arrived in her mail. It was a collection notice. It said she owed Ohio $28,173.

After she called the Ohio Attorney General's Office, which authorized Rossman & Co. to collect the debt and the debt collectors, she learned that her balance was the total amount of money she received during the pandemic in unemployment benefits.

"It almost makes me feel as if I did something wrong," she said. "Even though I know I did nothing wrong."

'A major cloud... looming over my head'

She tried to call the Ohio Department of Jobs and Family multiple times in hopes of clearing up the situation.

But, like many Ohioans, she has found it impossible to reach anyone at the state agency.

"That’s where it became a major cloud that started looming over my head and has not gone away," she said.

'Wreaking havoc'

"I think the state is creating, wreaking havoc," Senior Attorney at the Legal Aid Society of Cleveland Melissa Salamon said. "The government is trying to claw back all of this money from people who legitimately received it."

Salamon said Ohio Department of Jobs and Family Services employees admitted they accidentally sent unemployment claims to collections during a meeting with the Legal Aid Society of Cleveland.

"It was, it did not matter if it was a finding of fraud or if it was identity verification, they were just all sent over," she said.

By the numbers

News 5 Investigators found the Ohio Attorney General's Office has canceled over half of the unemployment accounts sent to collections between the start of the pandemic and July of this year.

News 5 Investigators found that the Ohio Department of Jobs and Family Services certified over 1 million unemployment claimants' accounts to the Ohio Attorney General for collection between the start of the pandemic and July of this year.

But out of those accounts, 567,941 were canceled by ODJFS.

"That tells me that most of those claims were actually legitimate claims with people who should have been getting unemployment benefits during the pandemic," Salamon said.

In an email, ODJFS Director of Communication Bill Teets acknowledged "two of the more common" reasons a collection debt is canceled are "pandemic-era overpayment waivers and ID theft."

He went on to write:

"As you know, identity theft was widespread. Some was caught early on, and some was caught as we worked our way through the hundreds of thousands of claims over the past several years. Cancellations would have occurred as we discovered and corrected an identity theft issue (e.g. someone discovers they are the victim of identity theft after receiving a collection notice, they make us aware and we cancel the debt)."

There are currently 349,919 claims that are still active, according to the Ohio Attorney General's Office.

89,796 were paid in full.

'It's not $50 bucks.'

We reached back out to Parma business owner Brian Glinka.

We first told you his story in January. Glinka was ordered to pay back $26,000 in pandemic benefits because of a missed deadline.

READ MORE: Parma business owner told to back pay over $26,000 in pandemic benefits because of missed deadline

The pandemic shut down his carpet-cleaning business.

After the state seized his lottery winnings last fall, he learned they want him to repay all of his pandemic unemployment benefits.

Then, like Stancil, he received a notice from a collection agency saying he owes Ohio repayment for all of his pandemic unemployment benefits.

"You know, you try not to let it bother you, but it does," he said. "It’s not 50 bucks. It's a decent amount of money."

Glinka received over $26,000 in Pandemic Unemployment Assistance (PUA), a temporary unemployment program meant to help workers who don't qualify for traditional unemployment benefits.

Glinka said he has spent months calling the Ohio Department of Jobs and Family Services to find out what he should do to clear the debt.

When one ODJFS employee finally returned his call, he missed it.

In her voicemail, the state worker promised to call him back.

"She said she'd call me back later in the day," Glinka said. "That was about two months ago."

ODJFS response

News 5 made multiple requests to interview ODJFS Director Matt Damschroder about unemployment claims that were sent to collections and whether workers who received overpayments during the pandemic should have to pay back the money.

After all, federal legislation permits states to waive recovery of non-fraudulent overpayments when the individual was without fault and "recovery would be against equity and good conscience," according to the U.S. Department of Labor.

But his Director of Communications declined our interview requests.

ODJFS has acknowledged it is difficult to reach the agency.

During the week of July 15, the average wait time for a call back from ODJFS was 4.2 hours, according to Teets.

'Step up and get this figured out'

"They've got to step up and get this figured out already," Glinka said.

It not only cost him lottery winnings last fall.

The Ohio Department of Taxation also withheld his tax refund this spring.

Ohio can seize any state funds you're owed, including tax refunds, to collect on unemployment debt.

"It's stressful and frustrating," he said.

Stancil is equally frustrated.

"I throw my arms up at this point," she said. "We would just go on year after year having them keep our taxes."

"What other choice do I have?" she said.

What should you do?

So what should Ohio workers who received a debt collection notice do?

"Some people should just wait it out," Salamon said. "There's actually a three-year statute of limitations for people who have received or have an overpayment on their account. The Ohio Attorney General cannot collect beyond three years for people who don't have a finding of fraud on their account."

"They can't collect beyond six years for those who do have a finding of fraud on their accounts so sometimes, for some people, it's better to that they just wait it out," she said.

However, individuals would be unable to access unemployment benefits if the debt is still owed because the funds would be used to offset the existing debt.

To figure out if you had a fraud finding, Salamon said you should go to your unemployment account.

"People basically need to be detectives," she said.

Then, find the most recent decision, which created the overpayment, to find out why Ohio says you owe them your unemployment benefits, she said.

If it's fraud, it should say "Notice of Fraud."

If there's a finding of fraud, you should take action because it will take action to resolve the issue because it will be six years before the state can no longer collect on the debt, Salamon said.

If there is no finding of fraud, it may be in your best interest to wait it out because many of the decisions were issued in 2021, so the three-year statute of limitations has already expired or will expire soon.

Legal Aid Society of Cleveland

Here is additional information from the Legal Aid Society of Cleveland: