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IRS refund applied to dischargable tax debt?

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Proserpina

Senior Member
What is the name of your state (only U.S. law)? WA

I owed back taxes from 1999 and they were included in my no asset Ch 7 filing; I filed my 2008 return after I filed the Ch 7 and it indicated a refund was due for overpaid 2008 taxes; the anticipated amount was listed as an exemption in the bankruptcy.

I went online earlier to check the status - I wasn't sure whether the refund would be released to the trustee - and then had to call IRS and was informed that the refund had been applied to the 1999 debt, even though they are aware of the Ch 7 filing.

Having spent the past two hours on the phone (to various departments), I still don't have an answer - are they somehow exempt from the automatic stay? As far as I'm aware there is no lien on any property (largely because I don't own any property) but IRS has taken every tax refund since 2002 to satisfy the 1999 dept. There is still an outstanding amount on the 1999 debt (thus trying to discharge same in the Ch 7).

Would appreciate any help, as I'm driving Google and myself completely insane trying to find out whether or not they had the right to apply this year's refund (which again is listed as a exemption) to the 1999 debt even after filing Ch. 7

Have not yet met with Trustee, and can't get in touch with legal advisor till late next week.What is the name of your state (only U.S. law)?
 


tranquility

Senior Member
Complex question. Even those who deal with this as their job would have to spend some time in research as we would need to know more facts about the situation. Sorry.
 

Proserpina

Senior Member
Thanks for taking the time to respond, tranquility :)

It's just been bugging me and no matter how proficient my Googlability is, I can't seem to find what I want!
 

tranquility

Senior Member
While google is your friend, it's not a good enough friend in this instance. You will need a knowledgable person to review the facts and a case law search.
 

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