Tax returned garnished to pay for debt that was already paid but....

[neiq]

I received a letter in the mail last year from a local hospital that stated I owed them $1300 and if I did not pay it they would take it from my sc state 2017 tax return. I saved up the money and payed it in full with my HSA. After filling my taxes this year I received a letter in the mail from SCDOR stating that they garnished my entire state tax return in order to pay for the above referenced account. I went down to this hospitals billing and they said their computers would down, but after they get them back up they would call me and get me a refund etc.. Later that day I received a call from them saying that my intial $1300 payment went in part to pay another bill of $800 on a different account and that left a balance on the $1300.00 bill so the garnished tax return went to pay the remaining balance. I did not authorize them to pay the $800 bill nor was I aware of it. Is it legal for them to do that and not notify the South Carolina Dept. of Revenue ?

 

[adjusterjack]

I did not authorize them to pay the $800 bill nor was I aware of it.

Your authorization was likely in the paperwork you signed at the hospital when you got the treatment.

 

[neiq]

Your authorization was likely in the paperwork you signed at the hospital when you got the treatment.

But The form I filled out (the one I put my hsa card # on) Specifically says this is to pay bill "xxxx" so how would that be ?

 

[LdiJ]

Your authorization was likely in the paperwork you signed at the hospital when you got the treatment.

You are quite likely right, but I find it extremely odd that a non-governmental business (a hospital) can garnish a state tax refund. Normally refunds, either federal or state cannot be garnished for consumer debt. Does SC have hospitals owned and operated by the state?

 

[LdiJ]

But The form I filled out (the one I put my hsa card # on) Specifically says this is to pay bill "xxxx" so how would that be ?

Its a bit odd, to say the least, but it was possibly legit. I would however, be asking for proof of that 800.00 bill, to make sure that it was actually yours.

 

[neiq]

You are quite likely right, but I find it extremely odd that a non-governmental business (a hospital) can garnish a state tax refund. Normally refunds, either federal or state cannot be garnished for consumer debt. Does SC have hospitals owned and operated by the state?

I think it is.

 

[neiq]

Its a bit odd, to say the least, but it was possibly legit. I would however, be asking for proof of that 800.00 bill, to make sure that it was actually yours.

How can it be legit if they didn't mention that bill when they made the claim with the Department of Rev? If i hadn't paid the $1300 in time would this $800 ever come up ?

 

[LdiJ]

How can it be legit if they didn't mention that bill when they made the claim with the Department of Rev? If i hadn't paid the $1300 in time would this $800 ever come up ?

Its a bit difficult to explain. If you legitimately owed both debts, the 1300.00 one may have been old enough to turn over to the department of revenue but the 800.00 one was not. Therefore, it might have been valid to use payments you made to cover the newer debt first, and towards the older debt last, as they knew that the older debt could be covered by tax refunds. Its not like the two debts were really all that separate. They were debts owed to the same creditor on basically the same account. (your SSN)

I understand your frustration. You thought that you did what you needed to do to make sure that your tax refund wasn't taken, and you likely counted on the tax refund to cover other expenses. The bottom line however is that if you really owed the debt, and the money covered the debt, you are likely SOL.

People who have never really suffered a poverty type situation do not get how a few hundred dollars, allocated the wrong way at the wrong time can devastate a family. Therefore they tend to be less than empathetic to people in your circumstances.

 

[neiq]

If i knew about it i would have paid it, just sucks cause there were plans for those funds. Thanks for your time.

Its a bit difficult to explain. If you legitimately owed both debts, the 1300.00 one may have been old enough to turn over to the department of revenue but the 800.00 one was not. Therefore, it might have been valid to use payments you made to cover the newer debt first, and towards the older debt last, as they knew that the older debt could be covered by tax refunds. Its not like the two debts were really all that separate. They were debts owed to the same creditor on basically the same account. (your SSN)

I understand your frustration. You thought that you did what you needed to do to make sure that your tax refund wasn't taken, and you likely counted on the tax refund to cover other expenses. The bottom line however is that if you really owed the debt, and the money covered the debt, you are likely SOL.

People who have never really suffered a poverty type situation do not get how a few hundred dollars, allocated the wrong way at the wrong time can devastate a family. Therefore they tend to be less than empathetic to people in your circumstances.