VA garnished tax return to pay debt I don't owe

[DatWunGai]

What is the name of your state? Arizona

USAF vet here. Back in 2012/2013 I attended a for-profit college, using Post-9/11 G.I. Bill benefits. In Spring 2013, due to a mid-month change to the VA's system for tracking enrollment/attendance, the school had to fix an attendance certification issue, and did so by dis-enrolling me, followed IMMEDIATELY (as in literally a matter minutes) by re-enrolling and then certifying attendance. Much later, the VA alleged that I owed them the cost of books and housing stipend for that month due to lack of attendance/enrollment, even though there was NO CHANGE to actual enrollment/attendance.

Only ever received one notice of that alleged debt, and I assumed that they'd eventually catch the error. Until today, when I learned that the VA had garnished 100% of my (and my wife's) federal tax return to pay that debt.

I have no idea where to even start looking for remedies on this one, so any help would be greatly appreciated.

 

[Taxing Matters]

You have to address this with the VA. It is the one that authorized the refund offset. (It is technically called an offset rather than a garnishment in the tax code as no court order is needed for it. The federal agency owed the debt merely needs to tell the IRS it is owed a debt of $X and request the offset.) It is never a good idea to assume a government agency or business will eventually see things the way you do and not respond to notices that you get. Instead, when you get a notice from a government agency asserting you owe money that you disagree with, respond promptly following whatever procedures are required to do that. If you do not do that, you might end up losing your right to contest the matter later. Whether you can still contest this now is something I don't know. But it won't hurt for you to contact the VA and see what you can do about correcting the problem.

 

[LdiJ]

What is the name of your state? Arizona

USAF vet here. Back in 2012/2013 I attended a for-profit college, using Post-9/11 G.I. Bill benefits. In Spring 2013, due to a mid-month change to the VA's system for tracking enrollment/attendance, the school had to fix an attendance certification issue, and did so by dis-enrolling me, followed IMMEDIATELY (as in literally a matter minutes) by re-enrolling and then certifying attendance. Much later, the VA alleged that I owed them the cost of books and housing stipend for that month due to lack of attendance/enrollment, even though there was NO CHANGE to actual enrollment/attendance.

Only ever received one notice of that alleged debt, and I assumed that they'd eventually catch the error. Until today, when I learned that the VA had garnished 100% of my (and my wife's) federal tax return to pay that debt.

I have no idea where to even start looking for remedies on this one, so any help would be greatly appreciated.

I don't know how you fix that with the VA, but your wife can file an injured spouse form to get back her prorated share of the refund. I suggest doing that ASAP while you are trying to figure out the rest.

 

[Taxing Matters]

I don't know how you fix that with the VA, but your wife can file an injured spouse form to get back her prorated share of the refund. I suggest doing that ASAP while you are trying to figure out the rest.

True enough. The injured spouse claim is made on Form 8379.