The Refund Down the Rabbit Hole: Tax Return Garnishment

It’s going to be great when that refund hits your bank account, isn’t it? You can pay down some bills, treat yourself to a new big screen, or maybe take a cruise in case the weather isn’t warm and sunny enough in SoFlo for you. Sounds terrific, doesn’t it? However, there might be a big LOL NOPE lurking out there and that refund you’ve been counting on might disappear right down the rabbit hole. You see, there’s this thing called garnishment, and the IRS and the Treasury might have plans for your refund that don’t include any fun stuff. This is called the Treasury Offset Program and there are some specific reasons that your refund might be garnished.

  1. If you owe in excess of $2,000 in court ordered child support.
  2. Delinquent or defaulted federal student loans.
  3. Non-tax debts owed to federal agencies.
  4. Taxes owed to federal or state tax agencies.
  5. Unemployment compensation monies owed to a state either as a result of fraud, overpayment, or unpaid contributions.

Any bells ringing here?

However, this doesn’t come out of the blue. This is a matter of due process, and they issue you a notice of a tax return garnishment to pay the debt. Whatever portion of your refund is left will be rendered to you either as a check or direct deposit. If you think your refund may be attached, but have not received a notice – or may have chucked your notice with the junk mail –  call TOP at 800-304-3107 or on TDD at 866-297-0517, Monday through Friday from 7:30AM to 5:00PM Central Time.

There are ways to appeal. For instance, if you and your spouse filed a joint tax return, but you are not responsible for your spouse’s debt, there’s the Injured Spouse Allocation form 8379. You may also appeal on the following grounds:

  • The debt has been paid off.
  • You are in a prepayment program and have been meeting your payment obligations.
  • You have filed for bankruptcy.
  • The original borrower has died, become disabled, or is non compos mentis.
  • In the case of a closed school like Corinthian College or a false diploma or certification, you are eligible to have that debt discharged.

Honestly, it can scare people right out of their pants to get a notice from any part of the federal government. If you get one of these notices and fall into any of the categories above, the answer is not to panic, and don’t hide the envelope under the sofa and pretend it never happened.

Yes, people actually do that.

What you need to do is to call us at Van Horn Law Group, get a free consultation that outlines your options, and let us get to work on saving your refund. We have a lot of experience that can work for you, and make sure that you have a good outcome. Even if you don’t get that big screen or go on that cruise.

About Chad Van Horn

Chad T. Van Horn, Esq. is a South Florida business leader and founding partner attorney of Van Horn Law Group, P.A. Through a combination of dedicated philanthropy, spirited entrepreneurship and legal expertise, he applies his resources and network to helping people. Learn more about Chad Van Horn

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