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Student Loan and Innocent Spouse


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Guest Taxed

My client calls me frantic that her tax refund has been intercepted by IRS because her new husband skipped paying student loans.

Come to find out that the loan was taken by the husband prior to marriage but in 2011 and 2012 (while MFJ) he made some payments and then stopped when he got laid off. To make matters worse no Fed taxes were witheld from unemployment compensation. Most of the witheld taxes were the wife's.

Can she file an innocent spouse claim to get the refund released?? What are the chances since she was married to this guy 2011 and 2012 and some interest payment was made from joint bank account.

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Guest Taxed

Obviously the fact that he stopped paying student loan was NOT disclosed to me at the tax prep interview. They actually deducted a few hundred bucks for student loan interest.

Since she received the IRS letter today I can imagine things must be pretty rough for him at the home front! (Wonder what's for dinner!)

With my new clients at the tax interview I always ask if there are any unpaid tax bills etc. I think i will have to start asking my existing clients as well (sort of ackward to ask when I have prepared their returns).

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It's not too late. You can send in the form separately now. (And, future years with the return.) Or she can make her hubby pay his bills or help him pay his bills.

If the money has been dispersed to another agency that agency won't give it back. It's pointless to send the form now.

Obviously the fact that he stopped paying student loan was NOT disclosed to me at the tax prep interview. They actually deducted a few hundred bucks for student loan interest.

Since she received the IRS letter today I can imagine things must be pretty rough for him at the home front! (Wonder what's for dinner!)

With my new clients at the tax interview I always ask if there are any unpaid tax bills etc. I think i will have to start asking my existing clients as well (sort of ackward to ask when I have prepared their returns).

A few hundred bucks isn't the end of the world. When he got laid off she should have helped him with his bills. Isn't that what marriage is all about (ok...I'm old fashioned).

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I had one for over $4000 which is much more than a few hundred bucks. This time the husband got nailed for his non-working, separated from spouse who had student loans before he married her. He just found out. I fully intend to file for the injured spouse wen I get caught up with regular stuff. And, no, he is done helping her with her bills. If it weren't for two small children that she uses as pawns, he would send her off forever.

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>>If the money has been dispersed to another agency that agency won't give it back. It's pointless to send the form now.<<

Didn't we just have this discussion last week?

According to the Instructions for Form 8379, the IRS will process the claim faster if you wait until the offset has been completed. Instructions--what a concept!

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Guest Taxed

My client can't sleep tonight so tomorrow right after work she is marching in to my office to fill out 8379 and see if she can get her portion of the refund back. Dare I ask how things are at the homefront???

What disturbs me is the fact that if IRS has already sent the refund to US Dept. of Education, how does IRS refund her portion of the refund? She was looking for assurance from me that the form would get her portion of the refund. I am speechless!

I never had to deal with this situation before, where I was completely in the dark about this BS!!! I think the creditor sends a notice before interception as a last chance to pay up?? How could you ignore that notice and not tell the tax guy??

I have had to file innocent spouse in a couple of situations but those were related to divorce issues.

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The IRS does not distribute the "captured" money for several weeks to allow for injured spouse claims to be filed, or amended returns to be filed. It takes as much as 8 weeks for captured money to make its way to the person or department that is owed the money.

File the injured spouse form. There is nothing to lose and sounds like some tax refund could be saved.

Remember though, the injured spouse form is only a request and is not binding at all.

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My client can't sleep tonight so tomorrow right after work she is marching in to my office to fill out 8379 and see if she can get her portion of the refund back. Dare I ask how things are at the homefront???

What disturbs me is the fact that if IRS has already sent the refund to US Dept. of Education, how does IRS refund her portion of the refund? She was looking for assurance from me that the form would get her portion of the refund. I am speechless!

I never had to deal with this situation before, where I was completely in the dark about this BS!!! I think the creditor sends a notice before interception as a last chance to pay up?? How could you ignore that notice and not tell the tax guy??

I have had to file innocent spouse in a couple of situations but those were related to divorce issues.

Because maybe he didn't know it would be taken from his tax refund. Maybe he has other things on his mind. Maybe he has multiple creditors bothering him. Maybe it got lost in the mail.

I know you feel "the guilt"...but I don't think it's our job to ask "any creditors on your doorstep?" Do you ask every client about "foreign income"? Or if they are supporting their widowed mother? You could spend hours going thru thousands of situations with each client.

The wife sounds like a gem...kicking the guy when he's down.

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