Yes, they can garnish your income tax.
If you are 60 days from when they terminated benefits you may be able to appeal the overpayment; however, you only appeal the overpayment if Social Security is wrong in the overpayment amount or circumstances of termination.
You can file a Waiver at the local Social Security office AT ANY TIME. The Waiver asks Social Security to waive all or part of your overpayment. They can also put you on a payment plan. If you are still disabled you may want to consider reapplying. If you are awarded benefits Social Security may collect the overpayment from your back pay.