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Can I file a hardship to get tax refund?


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#1 STEPHNE

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Posted 30 April 2013 - 12:33 PM

When I got divorced, my husband and I owned a construction company, I agreed to relinquish any claim to the business as long as he assumed all of the prior tax debt to the IRS. Since our divorce, the IRS has seized my ban account, and taken my tax returns for the past 3 years, totaling about $6500 each year. I am a single mother, working and going to school full time. My income is extremely limited, and I really need my tax returns. What can I do to get this money back from him? I don't have the funds to hire an attorney. Can I file something with the courts to get him to pay me for the money that the IRS has taken?

I have not filed my taxes this year, just the extension, hoping that I could get relief from the debt due to hardship. My rental home was flooded by Tropical Storm Debby and I had to relocate, FEMA helped with some of my expenses, but my vehicle has was damaged in the storm and will cost more than it is worth, to be fixed.I was not able to borrow money from SBA (disaster loans) due to this IRS debt. My mother has been lending me her car to go to work and school, but this is just a temporary arrangement. I need acces to my money. I know this is probably another seperate issue. BTW... I have spoken with the IRS advocacy and I can not file innocent spouse.



#2 STEPHNE

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Posted 30 April 2013 - 12:46 PM

When I got divorced, my husband and I owned a construction company, I agreed to relinquish any claim to the business as long as he assumed all of the prior tax debt to the IRS. Since our divorce, the IRS has seized my ban account, and taken my tax returns for the past 3 years, totaling about $6500 each year. I am a single mother, working and going to school full time. My income is extremely limited, and I really need my tax returns. What can I do to get this money back from him? I don't have the funds to hire an attorney. Can I file something with the courts to get him to pay me for the money that the IRS has taken?

I have not filed my taxes this year, just the extension, hoping that I could get relief from the debt due to hardship. I have heard that I would be eligible, but I vcan't afford to get a tax professional to help me. I went to a free tax preparation site locally, but it was more than they were qualified to do.

My rental home was flooded by Tropical Storm Debby and I had to relocate, FEMA helped with some of my expenses, but my vehicle has was damaged in the storm and will cost more than it is worth, to be fixed.If I could access my return this year I could buy a dependable vehicle. I was not able to borrow money from SBA (disaster loans) due to this IRS debt. My mother has been lending me her car to go to work and school, but this is just a temporary arrangement. BTW... I have spoken with the IRS advocacy and I can not file innocent spouse.

 



#3 pg1067

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Posted 30 April 2013 - 12:57 PM

When I got divorced, my husband and I owned a construction company, I agreed to relinquish any claim to the business as long as he assumed all of the prior tax debt to the IRS. Since our divorce, the IRS has seized my ban account, and taken my tax returns for the past 3 years, totaling about $6500 each year. I am a single mother, working and going to school full time. My income is extremely limited, and I really need my tax returns.

 

I assume you meant to say refunds, not "returns."  Of course, after the first time your refund got seized, it is inconceivable why you wouldn't have changed your withholdings so that you had less money withheld from your paychecks and, as a result, would have had little or no refund.  If you haven't already done this for the current tax year, I strongly suggest you look into this.

 

 

 

What can I do to get this money back from him? . . . Can I file something with the courts to get him to pay me for the money that the IRS has taken?

 

As you apparently understand, your divorce agreement/decree is not binding on the IRS and your recourse is against your ex-husband.  The appropriate way to deal with this situation, of course, depends on the laws of your unidentified state, but it will at least start by making a demand to your ex-husband (likely followed by a petition to have him held in contempt of court).  Have you done that?  If not, why not?  If so, what response did you receive?



#4 STEPHNE

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Posted 30 April 2013 - 04:47 PM

I have not filed a petition ith the courts, I did not know if that was a viable option. I will go to the courthouse tomorrow and see where that gets me.

 

Thank you for the information,



#5 STEPHNE

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Posted 30 April 2013 - 05:00 PM

I have a tax debt to the IRS that was incurred while I was married, but the ex-husband was ordered to pay it in our divorce documents. Unfortunately for me, he hasn't, and my tax refunds have been taken to pay that debt. I cannot file innocent spouse, my question is:

 

Can I file Hardship with the IRS to get my refund due to me this year? How do I do this? My circumstances warrant it, I was displaced by Tropical Storm Debby, my vehicle was damaged and is inoperable due to the flood, I have had to borrow a car, or get rides, to get back and forth to school and work. FEMA helped me with relocation, but referred me to the SBA Disaster Loans for help with my car, but the IRS debt kept me from getting any assistance...



#6 Tax_Counsel

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Posted 01 May 2013 - 01:18 AM

Can I file Hardship with the IRS to get my refund due to me this year? How do I do this? 

 

The only remedy available here is to seek help from the taxpayer advocate's office for a taxpayer assistance order. However, your other thread on this subject indicates you have already contacted the taxpayer advocate and told you didn't qualify for innocent spouse relief. It's not clear if you asked the taxpayer advocate to give the refund based on a financial hardship. If you haven't asked about that specifically, then get Form 911, fill it out, and send it to the IRS.  Please note that the taxpayer advocate cannot do anything contrary to the law, and as the law provides for the refund to be applied to other taxes you owe, relief allowing you to get the refund is extraordinary and may not be possible to get. 

 

Going forward, you ought to adjust your withholding so that you don't get big refunds when you file your return. It's better to have the extra in your paycheck and then get in the habit of putting that extra amount into a savings account or some good investment. Publication 919 can help you with that. 



#7 STEPHNE

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Posted 01 May 2013 - 04:50 AM

Thank you, I will follow your advice and file Form 911, and contact the TaxPayers Advocacy today. My tax withholding is appropriately filed, my refund is due to earned income credit.



#8 Guest_FindLaw_Amir_*

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Posted 24 May 2013 - 09:21 AM

You may want to visit the Tax Law Center as a good resource to learn more about this topic.



#9 mari1961

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Posted 10 March 2014 - 04:17 PM

I have been following this topic, and also I am trying to get my refund this year due to a financial hardship. I have spoken to an advocate, but  haven't given up on trying to deal with the IRS. I am on a special program with my bank ( since I was 18 months behind on my house Pymts)  after my refinance if I am even 1 day late my house goes into foreclosure. I have a very limited part time job, as my only source of income.  But since I am quote: not behind on my house, how can I claim hardship??? This is according to what the IRS told my advocate. I sent a letter to them from my bank explaining how this program works. I am currently not even bringing in enough money to keep food on the table and the lights on, because I have to keep making that payment to keep a roof over myself and my child's head.  Is it worth it to continue to fight with the IRS to get this "much needed" refund as a means for us to just survive???  Or am I wasting my time and stress?? If I am am, our government isn't for the people, and I indeed am disgusted that my own government would allow myself and my child to possibly become homeless. There is something really wrong with this picture.  I agree we all owe taxes, but if circumstances beyond your control make it impossible to pay, does that mean you are just out of luck? I just find it hard to view this as even human, it is really sad.  Any suggestions?? I will be changing my deductions next year, thank you for that. 



#10 Tax_Counsel

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Posted 10 March 2014 - 09:55 PM

But since I am quote: not behind on my house, how can I claim hardship??? This is according to what the IRS told my advocate. I sent a letter to them from my bank explaining how this program works. I am currently not even bringing in enough money to keep food on the table and the lights on, because I have to keep making that payment to keep a roof over myself and my child's head.  Is it worth it to continue to fight with the IRS to get this "much needed" refund as a means for us to just survive???  Or am I wasting my time and stress?? 

 

It's important to understand that the basic rule is that refunds are always offset to prior tax delinquencies that you owe, other federal debts you owe, or child support owed. The only exception to that is in cases of extreme hardship. Under the standard of extreme hardship, the IRS tax advocate will look at whether the taxpayer needs the cash to avoid some serious imminent consequence. For example, it would be an extreme hardship if the taxpayer has an eviction order against him that will be executed in 10 days resulting in the taxpayer being tossed out of his apartment and left homeless if the rent is not paid. That's something where if the taxpayer doesn't get the refund something dire is going to happen to him/her right away.

 

From the sound of it, your problem is simply that you might miss one payment on the house, the lender might start the foreclosure process. Foreclosure usually takes several months at least before it's done, and then after that some period of time more before the new owners get you kicked out of the home. I don't mean to minimize the stress or hardship involved with foreclosure, but from the IRS perspective, that gives you time to make arrangements for alternate housing. While having to do that is not fun, you are at least not going to be homeless in few days and thus are not facing an extreme hardship.

 

There isn’t a whole lot you can do if the Taxpayer Advocate denies your hardship request other than to ask to speak the manager. There is no court review available for these decisions because the hardship exception to the offset provision is not a right you have by statute. It is entirely a program set up by the IRS that is done at its discretion. In other words, having a hardship exception was something that IRS officials thought was a good thing to do, not something that the Congress or Treasury required it to do, and thus how the IRS administers the hardship program is up to the IRS officials that created it.



#11 Fallen

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Posted 11 March 2014 - 09:01 AM

Mari, it is very important for you to understand that changing your W-4 withholdings (and relevant state withholding) is not something you can only change once a year, so do not wait to change your exemptions if you are under-counting.

 

You don't say how much money we're talking about from the refund, but I'd think it more worthwhile to spend time/effort on seeking out local charitable assistance or extra income than railing against IRS about money you do not argue you don't owe.  (Ultimately, one presumes you're making use of what resources are available as to food and utility issues, but it may be that you should think about renting out a room or two for extra income (with very well checked out short-term/weekly or monthly tenants ... possibly another single mom?).)


I'll echo PG's advisory "warning" with a twist: (Many) legal issues are complicated. Explanations and comments here might not fully identify or explain the ramifications of your particular problem. I do not give legal advice as such (and such is impermissible here at any rate). Comments are based on personal knowledge and experience and legal info gleaned over a quarter century, and every state has differing laws on and avenues to address most topics.  If you need legal advice, you need to consult (and pay) a professional so that you may have someone to hold accountable.  Acting on personal and informational advice from a stranger on the internet is a bad idea -- at least not without your own thorough due dilience/research and confirmation as it applies to your situation.  :)





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