The Law requires a non-custodial parent’s taxes be levied to pay delinquent child support. The Debt Collection Improvement Act of 1996 was enacted into law on April 26, 1996, to authorize the Treasury Secretary to collect past-due child support by the offset of Federal payments. The procedure is detailed at 42 U.S.C. § 664.

In addition to federal tax refund intercepts, North Carolina also intercepts state tax refunds to pay delinquent NC child support. N.C. Gen. Stat. section 105A establishes a procedure through which debts owed to state agencies are deducted from state tax refunds. See N.C. Gen. Stat. § 105A-1 (1995).

Non-custodial parents (NCP) who owe more than $150 in back child support ($500 for those cases where the parent did not receive public assistance) are targeted for a tax intercept of their federal tax refunds unless excluded by Davis vs. NC Department of Human Resources, 349 N.C. 208, 505 S.E.2d 77 (1998). Non-custodial parents who owe more than fifty dollars in arrears are selected for tax intercept of state taxes unless exempted by the Davis case. Davis holds that a NCP who is in compliance with a court-ordered repayment plan for child support arrears should not be certified for Federal tax offset, even if back child support is still owed.

The Federal Income Tax Refund Offset program is operated by the Treasury Department’s Financial Management Service and the State Income Tax Refund Offset program is operated by the N.C. Department of Revenue.

Before a tax intercept occurs, the non-custodial parent is notified. On or about 30 September of each year, a Pre-Offset Notice is sent to non-custodial parents who are listed for federal tax intercept that includes certified arrearage amounts. An NCP has 30 days from the date of the notice to file an appeal.

NCPs receive a notice informing them of the total arrearages that are being certified for tax intercept. If current support has not been satisfied when state income taxes are intercepted, current support is paid first and then back child support are credited with any remaining amount.

The spouse of an NCP may file IRS form 8379 Injured Spouse Claim and Allocation Form with the IRS to protect their rights as to any federal refund.

After the agency receives the tax intercept, it is required under N.C. Gen. Stat. § 105A-8 to notify the debtor it has intercepted the tax refund. The notice must inform the debtor that the debtor has the right to contest the matter by filing a request for a hearing, the time limits and procedure for requesting the hearing. A petition for a contested case hearing under N.C. Gen. Stat. Ch. 105A, N.C. Gen. Stat. § 110-140 and 45 C.F.R. 303.72 is available at http://www.oah.state.nc.us/hearings/h06b.doc.

While a NPC who has his or her tax refund intercepted should appeal if the certified arrearage amount is incorrect, winning the appeal does not bring permanent closure to the issue. The Administrative Law Judge’s ruling is not binding on future tax refund garnishments. For complete and final closure, the NPC should consider a declaratory judgment action to determine the arrears or other action that will be binding on future determinations. Check with a NC Family Law Attorney for more information.

Related Blogs

• Know Your Income Tax Refund Status online | Tax Guru
• Check Federal Income Tax Refund Status for 2009, 2010 – mafiosomarketingrevealed.com
• How to Get Business Tax Relief from an IRS Installment Payment Plan | IRS Help

Be Sociable, Share!

• 

Related posts:

1. What Is An Inheritance Tax And When Is It Applied?
2. Finding the Right Irs Tax Debt Settlement Help
3. Spanish Tax Reclaims Open for Business
4. The Two Possibilities of Tax Season
5. The IRS Has Developed a Form Affidavit to Confirm That An Individual is a “Qualified Employee†Under the New HIRE Act