Tax liens on a dependent

Dear Tax Talk,
If you claim someone as a dependent and they have a judgment against them, will your taxes be held? -- Anna

Dear Anna,
The Internal Revenue Service not only collects taxes, it also has become the agency designated to collect certain other debts by offsetting any potential refund on your tax return.

Generally, when you file your return and claim a refund, the IRS can offset that refund for any other taxes you owe or, in the case of a married couple filing a joint return, amounts that your spouse owes. Your refund can be offset for pre-marriage tax debts of your spouse, but not debts arising after your marriage.

You're also not subject to offset of your spouse's debts if you file a separate return. And you can also get relief on a joint return for spousal debts through "injured spouse relief" as discussed in Form 8379.

The IRS also offsets refunds for nontax debts, such as defaulted student loans, past-due child and spousal support and state income tax debts. The IRS exercises this right on your return under the theory that the tax refund claimed belongs to the debtor or debtor spouse, and it has been requested to collect these neglected obligations.

Since the refund on the return does not belong to the dependents claimed on the return, the IRS does not have the authority to offset your property for your dependent's obligations.