PORTLAND, Ore. — Kathy Houck, struggling with stage-four cancer that has spread to her spine, survives on her federal disability benefit of $1,500 a month.

The Oregon Department of Revenue doesn’t see a critically ill woman whose health and finances have been ruined by cancer. It sees a tax scofflaw.

For months, the agency has threatened to garnish the Seaside woman’s bank account to collect $1,100 in back taxes. Agency collectors did so knowing the state has no right to grab her money. Under state and federal law, her Social Security disability income is exempt from the department’s collection attempts.

Houck, 59, is not alone in facing a state willing to bend the law.

Revenue agents in recent years have hounded hundreds, perhaps thousands, of Oregon’s poorest citizens, demanding tax payments that by law they don’t have to make. Since 2010, 485 state garnishments have been overturned after taxpayers established the tax agency improperly seized assets, according to data provided by the agency at the request of The Oregonian/OregonLive.

That’s likely a fraction of the number of impoverished taxpayers who have had the state swoop in to take money or threaten garnishment. Many, like Houck, are intimidated into signing repayment plans.

Revenue department officials admit the agency does improperly seize assets, but contend it is rare and happens only because it doesn’t know a citizen’s assets are protected. Collections are integral to gather the billions of dollars the state needs to operate.

Outraged consumer advocates this year turned to the Legislature, hoping for new restrictions that would better shield the poor from improper state collections. The legislation apparently is dead. A key legislative leader said House Bill 3172 isn’t necessary because the Revenue Department pledged to reform itself.

That will not reassure consumer advocates who have come to view the department as a hard-nosed bully.

“I tell my clients the IRS is like your grandma, sweet and reasonable,” said Todd Trierweiler, a Portland bankruptcy attorney who has represented thousands of financially struggling Oregonians. “The Oregon Department of Revenue is like Guido the loan shark — they want to take your kidneys.”

The Revenue Department runs the state’s income tax operation. The agency’s 1,000 employees last year processed 1.9 million personal income tax returns and collected more than $6 billion in taxes.

The state’s revenue agents have enormous discretion to make sure the state gets the taxes it can’t operate without. Employee turnover is high, particularly among the entry-level revenue agents who do much of the hands-on collections work. Of the 165 employees working in the personal income tax collections section, 50 were hired within the last 12 months, said agency spokesman Bob Estabrook.

The agency has a difficult job. While consumer protection advocates and bankruptcy attorneys claim the department runs roughshod over poor seniors, it has also been charged by the Legislature to get more aggressive.

In 2013, the Legislature awarded an additional $3.8 million to the department for the current two-year budget cycle with the charge to hire more bodies and beef up collection efforts.

Garnishments are one of the agency’s chief weapons to collect back taxes. It has the legal authority to seize a portion of a taxpayers’ wages from their employer or assets from their bank account.

The department is filing significantly more garnishments. The 74,767 garnishments it filed in 2014 marks a 25 increase from four years before. Those garnishments collected $61 million — nearly double the 2010 recoveries.

The state’s hunger for revenue collides with a reality of more downwardly mobile American retirees getting by on small fixed incomes.

For an increasing percentage of seniors, the golden years are shaping up to be anything but. An estimated one-quarter of baby boomers are retiring with no savings. Declining wages, the disappearance of most employer-provided pensions, low interest rates on savings and the economic crash of 2008-2011 contributed to a dramatically shifting demographic.

Social Security is the vital safety net for millions. According to the U.S. Social Security Administration, 22 percent of retired married couples and about 47 percent of singles rely on Social Security for 90 percent or more of their income. The average monthly Social Security payment is $1,492.

Of the 582,000 Oregonians over 65, nearly a third rely solely on Social Security for income.

State and federal law also have ruled certain kinds of income off-limits from taxation, most notably Social Security and federal disability payments.

“These are people who should not be burdened with taxes because their incomes are so low,” said Steve Sass, program director at the Center for Retirement Security at Boston College. “It’s going to get a lot worse. People didn’t make a lot of money, they didn’t save a lot of money.”

Like many Americans, Houck’s finances were ruined by sickness.

The Seaside woman can’t work. She was diagnosed with breast cancer four years ago, subsequently enduring a double mastectomy, chemotherapy, radiation, and infections. She learned in March that the cancer had metastasized to her spine.

That means, she says matter-of-factly, her condition is terminal.

When the state came calling last fall for its $1,100, Houck faxed a letter to the department explaining her situation.

“I am on Social Security Disability and money is very tight,” she wrote Sept. 5.

Two months later, a non-profit law firm called HELPS followed up with a letter stating Houck’s Social Security income was protected and that the agency should back off.

It didn’t. Instead, it issued a warrant on Dec. 5, the first step toward a garnishment. On April 22, the agency followed with a notice of garnishment.

With just $1,500 a month coming in and facing unending healthcare bills, Houck knew she didn’t have the money. But the official-looking state documents, particularly the word “warrant,” spooked her.

“They scare you,” Houck said. “I got that warrant. I thought I might go to jail.”

Others have found themselves in the Revenue Department’s crosshairs after financial setbacks.

Martie and Phil Coblentz ran out of money trying to treat a career-ending eye injury he suffered when cleaning his log truck in June 2010. Medical treatment for Phil, now 73, ate through savings. They turned to credit cards.

When the economy crashed, their home was foreclosed. They now live in their 40-foot RV, working as campground hosts at Champoeg State Park near Wilsonville.

The couple live on $3,800 a month — $2,200 in Social Security, her PERS retirement benefits and Phil’s IRA savings. Martie, 70, said she spends considerable time fending off the Revenue Department, which is demanding $13,000 in back taxes.

Revenue Department officials have conceded on the phone to the couple that much of their income is exempt from garnishment. But the department has never given up on collecting from the couple, repeatedly sending them notices through this spring that it intends to garnish their assets.

Lois Hughes suffered a similar fall out of the middle class and similar treatment from the Revenue Department.

She got laid off from her job at Tektronix in 2009. Much of the $400,000 she saved for retirement vanished as the economy tanked.

In a flash, she was unemployed, bankrupt and reliant on Social Security.

The state came after her claiming $11,000 in back taxes. The 70-year-old tried negotiating a payment plan with a state revenue agent over the phone. She offered $25 a month, which the collections agent dismissed as insufficient.

“He tells me I need to get rid of my car,” Hughes said. “He says they could attach my bank account, they could attach any wages. He was curt. He responded to me in such a way that it was understood it was a threat.”

Hughes eventually connected with Eric Olsen, a retired Salem attorney and founder of HELPS, a non-profit law firm that assists financially struggling Oregonians deal with their creditors. Olsen is a prime mover behind HB 3172.

The bill would direct the agency to tell people of the law protecting Social Security and disability benefits. It also would create clear rules halting collections against qualified low-income seniors and disabled.

At Olsen’s urging, Hughes testified at the House Revenue Committee’s sole hearing on the bill on April 8. Soon after, the Revenue Department wrote her, saying it would cease all collection efforts.

A Revenue Department official testified at that same hearing that the agency is aware it will lose any challenge to garnish Social Security benefits. But it attempts to collect anyway, hoping to cajole the taxpayer into a repayment agreement, Deanna Mack, department legislative liaison, told the House Revenue Committee in April.

Rep. John Davis, R-Wilsonville, heard enough at the April hearing to sign on a co-sponsor of HB 3172 joining the measure’s original sponsor, Cliff Bentz, R-Ontario. He said he didn’t buy Mack’s reassurances that the problem is isolated or that the department will mend its overly aggressive collection methods.

Rep. Phil Barnhart, D-Eugene, chair of the House Revenue Committee, said Wednesday the bill wouldn’t leave his committee. Unlike Davis, Barnhart accepted the Revenue Department’s promises to do better.

“I take the department at its word as to what it intends to do,” Barnhart said. “The issue is in front of us. We know about it now. It’s not going to go away. If the problem keeps continuing we’ll pass something like HB 3172 in the next session.”

Unlike Barnhart, Houck doesn’t have the luxury of waiting until next year. The Revenue Department demanded money immediately. Feeling intimidated and frightened, she agreed this spring to enter into a repayment plan. She made her first $73 monthly payment in May.