Mary Mercer v. Suzanne Magnant, Administrator of the Indiana Department of Public Welfare, and Mike Espy, Secretary of Agriculture

EASTERBROOK, Circuit Judge.

Before Indiana sends out a tax refund, it checks to see whether the recipient owes anything to the state. If there is a debt, Indiana notifies the taxpayer of an intent to apply the tax refund to the outstanding indebtedness. The state offers a hearing on the question whether there is indeed such an obligation. After the time to request a hearing passes — or after the decision, if a hearing is requested — the state sets off the debts and remits only the balance in the taxpayer’s favor. A district court has held that this tax intercept program, as applied to debts…