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socrateaser
socrateaser, Lawyer
Category: Tax
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Experience:  Retired (mostly)
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In order to get by while unemployed, I had to cash in 401 K

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In order to get by while unemployed, I had to cash in 401 K funds during the separation, and after the divorce was finalized. I had the financial institution set aside $60,000 worth of money for taxes. The money has already been sent to the IRS, according to the financial institution that cut me a check.

We are doing an equitable distribution.

Can a court in NC make the IRS freeze the money since I haven't paid my 2011 taxes yet? I had an extension filed.

Would it be a bad move to get my taxes filed and finished, BEFORE an injunction is filed?

Can the judge force me to turn over my tax refund, if I get one?
Submitted: 4 years ago.
Category: Tax
Expert:  socrateaser replied 4 years ago.
Can a court in NC make the IRS freeze the money since I haven't paid my 2011 taxes yet? I had an extension filed.

A: No. The only authority of a state to intercept/freeze money held by the IRS is granted to the child support enforcement agency in the state, and then only to secure payment of child support arrears. A family court order cannot impair IRS operations.

Would it be a bad move to get my taxes filed and finished, BEFORE an injunction is filed?

A: I don't believe it matters, either way. See below.

Can the judge force me to turn over my tax refund, if I get one?

A: Yes. Assuming that your spouse knows about the money, or he/she finds out during the course of the divorce, then the court could order you to turn over the money immediately upon receipt from the IRS (or, to place the money in a blocked account, and then the court would order the bank to freeze the account).

In short, the family court can get around the inability to force the IRS to take certain actions, by simply waiting for the funds to reach your bank.

Hope this helps.

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