Generally there should be no reason that your claim for Injured Spouse should be denied, unless you live in a community property state, which you do not.
Filing the Injured Spouse form would not protect your entire refund. But it should protect a percentage of the refund that is attributable to your husband. Just as an easy example, if you each earned $25,000 per year and had a total refund coming of $600, then $300 of that refund should still be paid, and the other $300 would be applied to your student loan.
Your husband would be the one who needs to contact the IRS if they are not allowing for this type of allocation on your refunds, as they will only talk to the taxpayer who filed the form.
As far as the balance that is still due on your loan, that is not something we could help you with in this forum, as we only deal with tax issues. Your student loan debt no doubt has increased due to interest being added over the years, but it would be impossible for us to know how much you actually still owe on this loan. You should really try contacting the original lender, and ask them for a printout of your account that shows all charges and all payments made to date on your account, and maybe then you will have a better idea of how they came up with their figures, and can see if perhaps an error was made.
In the meantime, regarding your tax issue, your husband really needs to contact the IRS and have them explain why his Injured Spouse claim was not honored. If the IRS made a mistake, this would at least get back some of the money that has been withheld. If you are unable to get a satisfactory explanation from the IRS, you should try contacting the Tax Advocate's office in your area. This is a free service offered by volunteers who can sometimes help taxpayers with issues they are unable to resolve on their own with the IRS. Here is a link to the Taxpayer Advocate offices located in Ohio.
Until you are able to get this issue resolved, your best course of action would be to decrease the amount of tax which is being withheld from your paychecks so that at the end of the year, you have no refund coming. They cannot withhold any money from you if there is no refund to withhold it from.
Your other option would be to file separate tax returns
, although this option may result in higher taxes. That being the case, you would be better off just to adjust your withholding
amounts so that less tax is taken from your paychecks.
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