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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29483
Experience:  Taxes, Immigration, Labor Relations
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If I owe medical bills can they take my taxes?

Resolved Question:

If I owe money on medical bills, can they take that out of my return? There are no Judgments against me at all, should I expect any problems with my return? These bills are three years old, and have not affected my last two returns.

Submitted: 7 years ago.
Category: Tax
Expert:  Lev replied 7 years ago.

Not from your federal return.

The Department of Treasury's Financial Management Service (FMS), which issues IRS tax refunds, has been authorized by Congress to conduct the Treasury Offset Program. Through this program, your refund or overpayment may be reduced by FMS and offset to pay any past-due child support, Federal agency non-tax debts, state income tax obligations or certain unemployment compensation debts owed a state (namely debts for compensation that was paid due to fraud or for contributions due to a state fund that were not paid due to fraud).

So - your federal tax refund may not be offset to satisfy your debt resulted from medical bills.

Some states have programs to garnish state tax refunds for medical debts.

Let me know if you need any help.

Customer: replied 7 years ago.
So it should not come out of my federal return?
Expert:  Lev replied 7 years ago.

That is correct - federal tax return would not be garnished to satisfy your debt other than mentioned above - past-due child support, Federal agency non-tax debts, state income tax obligations or certain unemployment compensation debts owed a state (namely debts for compensation that was paid due to fraud or for contributions due to a state fund that were not paid due to fraud).

Even there is a judgment against you - the federal tax refund may not be garnished.

However as soon as you deposit the refund in your bank account - funds may be seized.

Customer: replied 7 years ago.

Okay then one more thing.
There is no judgment against me, so no funds will be taken, or seized, Correct?
No one can access my account without a judgment, right?
Thanks for your time, and I will use you again in the future.

Expert:  Lev replied 7 years ago.

A federal tax refund may not be seized except for debt for types of debt mentioned above - that is correct.

Let me know if you need any help.

Lev and other Tax Specialists are ready to help you