Top 5 Reasons to Avoid Bankruptcy in Illinois and Opt for Debt Settlement Using Benveniste Law Offices
Most Americans look forward to receiving their tax refund each year. They might have big plans for spending that money, such as putting a down payment on a car, making repairs to their home or taking a dream vacation. However, individuals who struggle with debt issues often worry about the security of their tax return. It’s important for debtors to know that the Internal Revenue Service (IRS) can only seize a tax refund on behalf of a debt collector in certain situations.
When Tax Refund Intercepts are Permitted
Generally, there are only three situations in which the IRS would intercept a tax refund. They are as follows:
- A person is behind on child support payments: Child support enforcement offices in each state can make a request for treasury offset when a person has child support payments that are past due.
- A person is behind on income tax payments: The IRS itself can act to seize a person’s tax refund to satisfy income tax payments that are past due.
- A person has defaulted on their student loans: The Department of Education can request a treasury offset from the Treasure Department for any student loans that are defaulted.
Other types of debt, such as credit card debt, late car payments, medical bills and more cannot be offset with a tax refund. However, there are other ways in which creditors can legally get money from the debtor to pay off their debt, such as wage garnishment. If a person is contacted by a debt collector who threatens to seize their tax refund, they should report that individual or the debt collection company to the Better Business Bureau or Federal Trade Commission for violation of the Fair Debt Collection Practices Act (FDCPA).
Notification of Intercept
No matter what entity makes a request to intercept a person’s tax refund, they must inform the individual beforehand. Most often, it’s a debt collection agency that has been assigned by the entity to obtain a tax refund if there is still an outstanding debt owed. Individuals who believe they might be subject to a tax refund intercept can contact the Treasury Offset Program call center.
When Doesn’t the IRS Intercept a Tax Refund?
The IRS does not intercept tax refunds under certain circumstances. They include the following scenarios:
- The individual is deceased
- The individual is currently under criminal investigation
- The person is under 18 years old
- The individual resides in a designated combat zone
- The individual residents in a presidentially declared disaster area
- The person is a victim of tax identity theft
- The individual’s spouse is injured
In any of those situations, the IRS won’t attempt to collect a tax refund. If the account was contracted out to a collection agency, the account will then be returned to the IRS.
Although the IRS may not intercept your tax refund for credit card debt, creditors can still pursue legal action to seize your assets and freeze your account. If that happens to you, get in contact with an experienced Illinois credit card debt attorney who can help alleviate your debt issues. Heather Benveniste with Benveniste Law Offices has seven years of experience as a debt collection attorney in the Debt Buying Industry and has inside knowledge of how the other side operates. She can use such insight to aggressively combat debt collectors and negotiate debt settlement on the most favorable terms to you. Contact us today for a free case evaluation.
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