What if You Don’t File IRS Taxes and Owe Child Support?

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What if You Don’t File IRS Taxes and Owe Child Support?

 

In the United States, if you are due a tax refund, but the Internal Revenue Agency (IRS) has evidence that you have not paid specific debts, part or all of your federal tax refund can be applied to your unpaid debts. Among the debts that qualify for this redirection of tax refund dollars by the Financial Management Service (FMS) are state taxes, IRS taxes, and child support payments. 

If you anticipate that you will receive a tax refund this year and know that it will likely be redirected to child support payments you owe, do you have any options? Could you simply avoid filing your IRS taxes this year? Technically, yes. But there are pitfalls to avoid. Let’s take a closer look. 

 

When You’re Behind in Child Support

Separation agreements and divorce settlements commonly end with one parent owing child support payments to the other. Whether or not you agree with the amount of child support you owe, if you neglect to make payments, or fall behind on your child support schedule, the receiving partner can make a complaint to the Office of Child Support Enforcement (OCSE).

This is when your information is passed from the state to the federal level. In turn, the OCSE can report your overdue child support to the Treasury Department. Naturally, this has far-reaching implications for you and your IRS tax profile. 

In other words, whether you are struggling to make child support payments or have intentionally withheld them as a form of protest, your failure to pay can quickly transition from a state enforcement issue to a federal one that impacts your IRS taxes. 

 

When Government Information is Shared

How does this happen so quickly? The answer comes down to information-sharing agreements at the federal level. IRS tax refunds are issued through the Treasury Department’s Bureau of the Fiscal Service (BFS). Congress authorizes BFS to run the Treasury Offset Program (TOP), through which government information is shared. 

If you are currently behind on child support payments, it’s possible that the Treasury Department already has this information on file. Under the TOP program, the IRS can redirect money that you were to receive as a tax refund and give it to the child support agency related to your case. This financial penalty is known as an IRS Tax Refund Seizure.

 

What if You Take Matters into Your Own Hands?

If the government can so easily share information and redirect your tax return, why can’t you be proactive and skip out on filing your taxes? After all, you may only be in search of a short-term reprieve from paying child support. You may want a temporary halt on your payments, especially if your separation or divorce has yet to be finalized through the courts. 

Unfortunately, the IRS is not flexible about whether or not it makes sense for you to file your taxes. If you fail to file IRS taxes, you can face penalties such as: 

 

  • Failure to Pay Penalty – If you fail to pay IRS taxes you owe, you will be charged a penalty of ½ of 1 % of the unpaid tax for each month (or partial month) that you fail to pay, maxing out at 25% of the unpaid taxes. After a period of time, you may receive a notice of intent to levy from the IRS. After 30 days if you fail to pay or respond to the IRS, they can levy your bank accounts or garnish your wages. 
  • Failure to File Penalty – If you neglect to file your IRS tax return the penalty is 5% per month, capping at 25% of the tax due The IRS will also charge interest on any taxes due. 

 

But what if you are expecting a refund this tax season? Aren’t the penalties and fees around IRS taxes for those who owe money, after all? There are taxpayers who don’t need to file a return in the United States, but you would need to meet all the following conditions:

  • You earn less than the 2023 standard deduction of $13,850. 
  • You have no special circumstances that require you to file.
  • You don’t have an unearned income of more than $1,150 as a child or other defendant.
  • You don’t have self-employment income greater than $400.

Unless you meet all these requirements, you are expected to file IRS taxes each year. 

 

What if You’ve Already Filed? 

What if you considered not filing your IRS taxes, but filed them before you realized your tax return might be redirected? Is it too late to make any changes? 

In this case, you’ll receive a Notice of an IRS Tax Refund Seizure. This document gives you an advanced warning of the redirection of funds before it happens. If you are counting on a large return, you may worry that the redirection will leave you struggling to make ends meet.

If you’re married to someone who owes child support—and don’t owe the debt yourself—you can file an “Injured Spouse Allocation” form, which will allow you to keep your portion of your tax refund. It is important to file this form as quickly as possible, after receiving notice of an IRS Tax Refund Seizure. 

 

Finding the Right Balance

As you consider your options regarding filing your IRS taxes, it’s important to keep your situation in mind. Even if you disagree with the amount of child support you are expected to pay, it is important, in the eyes of the court, to make your payments on schedule. If your divorce has yet to be settled, it helps to make payments in good faith before a tax refund seizure is required. 

No matter how you proceed, when it comes to matters related to the government and your IRS taxes, it is critical to have the right support in place. Tax experts are familiar with state and federal tax laws, as well as current guidelines and regulations. An experienced team will have worked with plenty of clients with questions about child support payments and the details of IRS Tax Refund Seizures.


At Franskoviak Tax Solutions, we have helped thousands of clients with IRS taxes and tax problems for more than 30 years. We provide comprehensive tax services with first-class expertise and a personalized, boutique-style approach. Speak to our team about personal and business taxes, IRS tax deadlines, payroll taxes, IRS tax relief and tax problems such as IRS tax notifications, payroll tax debt, delinquent taxes and more.

Start with a free consultation—we’re here to help you work through common tax problems, as well as more complex scenarios, including IRS Tax Refund Seizures.

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