North Carolina expects to recover an initial $15 million in fraudulent unemployment insurance overpayments by targeting peoples federal tax returns.

The new initiative, called the Treasury Offset Program, allows state officials to recover the overpayments by tapping into the Internal Revenue Service’s tax refund program. The Division of Employment Security sent letters Thursday to alert those being targeted by the program.

The list includes more than 19,200 people who have committed fraud and exhausted appeals, said division spokesman Larry Parker.

The division will ultimately seek up to $50 million for repayment starting in January, a Friday press release states. Some of the $50 million is expected to be recovered through an existing program that works with the N.C. Department of Revenue to target state tax returns.

Staff writer Jeanna Smialek

In addition to overpaying millions in unemployment benefits last year, the state's Employment Security Commission also paid $147 million in benefits out of the wrong account, according to an annual audit of the agency's finances.

The $147 million was paid out of the state’s unemployment trust fund when it should have been paid from federal unemployment trust funds.

The error will actually lower the total amount the state owes the federal government, ESC spokesman Larry Parker said.

North Carolina has borrowed about $2.5 billion from the federal government in recent years to pay benefits out of its state trust fund. Payments from the federal trust funds don’t require repayment.

The ESC faced a firestorm of criticism last fall after it began recouping $28 million in overpayments it mistakenly made to about 38,000 unemployed workers.

Here's an update on the looming interest payments that North Carolina will soon owe the federal government for the billions it has borrowed to pay unemployment insurance benefits.

The Employment Security Commission reports that the state's current tab is $2,559,140,637.22.

The exact payment due in September will depend on how much additional money the state borrows between now and then.

North Carolina is paying an interest rate of 4.1 percent on the money, which means the state will owe at least $104 million in September.

The White House issued a release today saying Congress' failure to extend unemployment benefits will cause 232,285 people in North Carolina to lose benefits.

The report was prepared by the White House Council of Economic Advisers. 
 
The report says nearly seven million workers in the country will be affected.

To view the full report go here.