Tax refund interception

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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 outstanding taxes, student loans, child support, fines, restitution, and wage garnishments. While taxes are sometimes intercepted to pay off the balance to a government-operated collection agency, most jurisdictions do not 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,[1] certain past-due support obligations,[2] debts owed to other Federal agencies,[3] state income tax obligations,[4] and certain unemployment compensation debts.[5]

References[edit]

  1. ^ Internal Revenue Code section 6402(a).
  2. ^ Section 6402(c).
  3. ^ Section 6402(d).
  4. ^ Section 6402(e).
  5. ^ Section 6402(f).

See also[edit]