Here's a rewritten version of the content to make it plagiarism-free and unique:
A standoff involving Congress and the IRS, focused on taxpayer privacy, has resulted in the suspension of a form of child support for families in at least 10 Native American tribes. This issue has the potential to impact all 50 states as early as this fall, affecting hundreds of thousands of additional households. Each year, over 1 million tax refunds are garnished at the request of state governments and redirected to custodial parents, representing $2 billion, or 6 percent, of all child support payments in 2022. For many families, these refunds are their sole source of child support.
However, federal law prohibits Native American tribes from collecting overdue child support through the tax system. The IRS has now halted a previous workaround that allowed some tribes to seize these funds. Simultaneously, there is a separate concern regarding states' data sharing practices that could disrupt the system more broadly.
Most states use contractors to retrieve and redirect federal refunds to custodial parents. Yet, the IRS is mandated to share certain taxpayer information only with governments, not third parties. Last year, the agency announced it would adhere to data-sharing restrictions in all cases, giving states until October 2024 to submit compliance plans, which most states consider too costly to implement.
This situation could affect a significant portion of the 13 million children covered by child support agreements, half of whom live near or below federal poverty levels. The average federal tax refund for the 2023 filing season was $2,850. While many anticipate either the IRS or Congress resolving the issue before it escalates to the state level, hundreds of tribal members have already been affected. IRS officials did not respond to queries from The Washington Post regarding the discrepancy in treatment between states and tribes.
Kimberly Brockie, a member of the Gros-Ventre tribe in Montana, has struggled to receive child support from her ex-partner since their 2007 separation. The last payment she received was his $1,600 tax refund in 2021; he still owes her over $30,000. Her ex confirmed the debt, citing disagreements with Brockie over parenting decisions as the reason for withholding support. Brockie, who manages a college bookstore, expressed frustration, stating that she has incurred debt trying to support her three children and is still recovering financially.
Willowa “Sis” Horn, who oversees the child support program for Brockie's tribe, stated that the tribe has around 300 cases but only 56 paying parents. They sought access to tax intercepts to reduce their substantial debt but have been unable to do so.
The use of contractors by child support programs varies across states. For instance, Kansas has largely privatized its system, while others rely less on contractors. However, even states without contractor assistance have faced issues with IRS compliance. In North Dakota, the director, James Fleming, was informed by the IRS that he was improperly sharing taxpayer data because he collaborated with the state treasurer’s office to issue checks.
Some tribes circumvented data-sharing rules by having states submit lists of delinquent parents to the IRS. However, the IRS later deemed such arrangements illegal, resulting in tribes losing access to federal tax offsets. In Wisconsin, tribal child support assistant director Sunnie Bisonette stated that approximately 700 families in the Lac Courte Oreilles tribe lost access to federal tax offsets, with the average annual payment exceeding $1,200.
These developments have exacerbated economic challenges on Native American reservations, where tribes are already grappling with high unemployment and economic depression. The loss of this vital source of support has further burdened families in these areas.
Austin Kasto, a member of the Standing Rock Sioux tribe in North Dakota, saw a significant reduction in child support following her divorce. However, this changed when her ex-husband had more children, resulting in larger tax refunds that were garnished for child support. The recent IRS policy change has impacted her ability to receive these refunds, affecting her ability to afford expenses such as her son's braces.
The situation remains unresolved, with child support professionals urging Congress to amend the law to allow the use of contractors. Despite a hearing on the matter in the House last year, no vote has been taken. IRS Commissioner Danny Werfel has indicated a potential delay in enforcement if Congress fails to act by October, though state officials remain concerned about the sudden urgency regarding contractors.