In a few instinces, an agency can ask the IRS to intercept (take) your tax reimbursement and use the cash to your financial obligation.
Whenever Tax Refund Interception Is Allowed
Tax refund intercepts are allowed in these situations:
- you are in default on student loan payments
- you are behind in income fees, or
- you are behind in your child support.
Notification and Defenses
Before the IRS takes your cash, the company must notify you. You can provide written evidence or have a hearing to show that any of the following is real:
- Your debt has been settled.
- The quantity of the proposed intercept is more than you owe.
- The intercept is not lawfully enforceable.
Intercepts and Student Loans
Tax reimbursement intercepts are many typical in the instance of a defaulted student loan. Each year, for example, the federal government pockets hundreds of millions of bucks by grabbing tax refunds from hundreds of thousands of former students. (For lots more on student loan collections, including stopping or avoiding income tax refund intercepts, see Student Loan Debt.)
If the intercept is for a student loan, you can make a written request to review the agency’s file on your loan and the agency seeking the offset will consider other information, such as information showing you qualify to have your loan released because the school closed, falsely certified your eligibility, or were unsuccessful to pay refunds owed because you left before conclusion of the course.
Tax Refund Intercepts for Child Support
If you are married and the intercept is for child support from an earlier relationship status, your partner can file a claim for her share of the reimbursement.
Avoiding a Tax Refund Intercept
If your income tax refund is small, you will have less to lose from an intercept. You can boost the money you receive with your income during the year, so your tax reimbursement at the end of the year is maybe not that large.
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