Can Military Star Card Intercept Taxes?
Posted: Fri Mar 10, 2017 11:43 am
Hi,
I have a Chapter 7 client where the IRS has been withholding his tax refunds due to a Military Star Card debt, which has been sold to a debt collection company. I want to confirm that this debt is dischargeable since it does not fit any of the categories under 523, or is there case law/other provisions that except it since it is a federal debt? Things are not always as straight forward as I would hope, and I want to make sure I am not overlooking any special rules for federal debts. I know that his 2016 refund will be withheld and set off.
Also, are there any additional tax consequences when he receives his discharge for this debt, and will the IRS stop withholding my client's future refunds for this debt? I am concerned that since the 7 will be filed three months into the 2017 tax year, the IRS will still withhold his 2017 refund for a debt that will be discharged.
Thanks!
Sloan Law Office of William S. Youkstetter
(323) 219-4392
lawofficeofwilliamsyoukstetter@gmail.com
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