A tax refund interception is the act of an agency responsible for sending tax refunds using all or part of a refund to fulfill an obligation of the taxpayer rather than sending the money to the taxpayer him/herself.
Some common obligations for which tax refunds are intercepted include student loans, child support, fines, restitution, and wage garnishments; however this is usually done if said debts are in considerable arrears. Debtors who have been making agreed payments on the dot are usually not subject to this as creditors often feel interception unnecessary. While taxes are sometimes intercepted to pay off the balance to a government-operated collection agency, few jurisdictions allow refunds to be intercepted to pay a private collection agency.
In the United States, the Internal Revenue Code allows the Internal Revenue Service (IRS) to divert overpayments of taxes to satisfy other federal taxes, certain past-due support obligations, debts owed to other Federal agencies, state income tax obligations,, county taxes, local taxes and unemployment compensation debts. Unlike private debts, refund interception for the said taxation will often occur even if prompt prior payments were made.
Video Tax refund interception
References
Maps Tax refund interception
See also
- Garnishment
Source of article : Wikipedia
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