02/14/2012 03:17 pm ET

Owe Chicago A Fine? City May Dock Residents' Tax Refunds To Collect Overdue Funds

Do you owe the city of Chicago some money for an overdue parking ticket or other fines? Under a proposal approved Tuesday by the City Council Budget Committee, the city will have the authority to put a hold on residents' state tax returns until the owed money is paid up.

According to the Chicago Tribune, the city is optimistic that the proposal could result in between $8 million and $20 million in revenue collected from unpaid parking tickets, traffic citations and administrative hearing judgments such as building code violations.

Tina Consola, managing deputy director of the city Finance Department, described the funds as a "bonus" for the city, as it was not factored into the equation of its most recent budget, the Tribune reports.

The proposal would impact an estimated 100,000 Illinois residents and businesses alike who could see their unpaid debts, dating back to 2005, deducted from their income tax returns. And if the debt is higher than the return in question, the Chicago Sun-Times reports, the claim will come up again the following year -- and each year until the full debt is paid.

Several aldermen, including Ald. Latasha Thomas, say residents should be warned before the funds are collected by the city, according to CBS Chicago, and the state will reportedly issue a notification to residents informing them of the hold on their return.

Meanwhile, Mayor Rahm Emanuel on Tuesday introduced an ordinance he said would protect the city's taxpayers from falling victim to commercial tax preparers' bad business practices -- such as "hidden charges, unfair repayment rules and misleading information" leading customers to pay more for pricey tax preparation products they don't need.

The full City Council is expected to take up both matters in their Wednesday meeting.