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 Dear
Tax Talk,
My wife had a student loan, but the school went bankrupt
before she could finish the course. She did not get her training and the school
kept all tuitions. For the past 17 years when we've filed taxes, the state of
Florida has been taking them. The federal government has dismissed the loan, but
a company in Florida bought the loan and somehow they got approval to take my
tax refund. Can they take my tax refund even if it was incurred before our marriage?
How can I make them understand that the student loan has been charged off?
-- Fred
 Dear
Fred,
IRS Tax Topic 203 discusses the Treasury Offset Program for
past-due obligations. These include amounts owed for child support, federal agency
debts and state income tax obligations.
The Treasury Department's Financial
Management Service, or FMS, acts as a collection
agency for the creditor that notified them of
the past-due debt. FMS will send you a notice
if an offset occurs. The notice identifies your
original refund amount, your offset amount, the
agency receiving the payment, and the address
and telephone number of the agency. The IRS will
not be informed of the agency receiving the offset,
but FMS will notify IRS of the amount taken from
your refund.
Since the
debt is only your spouse's, you are entitled to your portion of the refund even
though you are filing a joint return. According to Tax
Topic 203: If you filed a joint return and
you're not responsible for the debt, but you are entitled to a portion of the
refund because you reported income, payments, or credits on the return, you may
request your portion of the refund by filing Form
8379, Injured Spouse Allocation. Attach Form 8379 to your original
Form 1040
or file it by itself after you are notified of an offset. If you file a Form 8379
with your return, write "INJURED SPOUSE" at the top left corner of the
Form 1040. Because the IRS will process your allocation request before an offset
occurs, filing Form 8379 with your original return may take 11 to 14 weeks from
the date of filing to process your return. The
IRS does not get into the validity of the debt. You should contact the agency
shown on the notice of offset if you believe you do not owe the debt or you are
disputing the amount taken from your refund. | 
