My dad married a girl in August 2007. She had many defaulted student loans from a couple of years before they met. She is on disability. (I am not sure why she is but she gets ~$5000/yr). My dad has an income of >$250000/yr. His tax refund this past year was $17k (federal only) and the student loan lender garnished the entire refund.

They filed Married filing Jointly, he claims her and her dd as his dependents.

Her small amount of disability income was shown on the income tax return.

Question: Can the refund be garnished to pay her defaulted SLs when they occured before the marriage and she really has no income to speak of?

If they can garnish the refund, why haven't they been garnishing her disability payments all along?

My dad was sent a notice of the garnishment and has 30 days to respond.

Thanks for any insight into this.

two words to look up on IRS website.



innocent spouse.

Thanks, I did look it up and there are 2 terms. "innocent" and "injured". If I am reading this right, WV is a community property state, therefore requiring the "injured" spouse form basically saving only 50% of the refund. The "innocent" spouse form wants you to basically prove that you were coerced or a victim of abuse, etc. Which of course my father was not.

I hate to say this, but by reading the forms, it sounds as though it is made more for the protection of women rather than men. (kind of like a domestic abuse petition) Before anyone flames me...I am a woman.

I appreciate the point in the right direction. Thanks.

it works for both genders. your father should get most of his refund based on this rule it just will be delayed on a yearly basis.

Your dad needs to file the "injured spouse" form. His refund this year will be returned, well 50% since he's in a community property state. Then he needs to file it every year, with his taxes. It will delay the refund but at least he won't lose all of it.


*speaking from experience

Thanks to everyone who replied. The IRS doesn't list our state as a community property state, but when I searched on the net, I found WV was considers marital property "communitive". So, I think that will apply to this situation. I did tell my dad to file the "injured" form, he will be doing so. I also told him to prepare himself for only getting back 50% of the original return. I will be surprised if he gets that much back.

Another question, since the girl he is married to only gets her disability and child support as income, does she even legally need to prepare a federal return? And if not, can my dad file MFS, and not include her as a dependent next year and avoid this from happening again?

If she has only been in default a couple of years, the student loans probably have not caught up with her yet. It sometimes takes time.

Does she have have a serious enough disabiltiy that would allow the loans to be cancelled?? Or will she be returning to the work force at sometime in the future?

In my opinion, she does not have a serious enough disability. I think her disability might be panic attacks or possibly a personality disorder. These problems do not keep her from shopping and spending significant amounts of money thus, I maintain that she could stand on the opposite side of the cash register and work. JMHO.

Her SLs have been in default for aprox~6 yrs. They came due when married to DH#1, the court made him make additional payments to her to put on the SLs-she did not. DH#2 was young and didn't make $$. DH#3 was young and didn't make $$. My dad is DH#4 and has a very good income. I don't even think she has filed a return since she was married to the first DH. (Which is why it is catching her now)

She is my age (35) so I think that if she were put into a position of needing to work, that she would. She is working on a singing career and just made a CD-so in a way that is work. Right? I think if the SS office would investigate, then she would lose her disability.

Can the dad not just adjust his withholdings January1st and get no tax refund at the end of the year? Then there is no refund to garnish?

saladdin

I think in most cases that is exactly what you should do, and of course there are calculators to help one figure that amount. However, my dad is also a business owner (multiple ventures) and it would be very difficult to adjust his federal withholdings from his main professions to compensate for the other businesses. Good idea though, for a more conventional situation.


By the way, dad said he called the IRS today and they said he would get the entire amount back. I am still doubtful.

Not a direct answer to your question, but just some advice to give your Dad:

Plan your taxes better. Throughout the year, ALL taxpayers should be paying exactly (or a bit less than) what one will owe for the year. Taxpayers' goal should be sending a check for $1 to the IRS.

Put another way, let's pretend your boss is the IRS. Your boss says he is going to keep 30% of your paycheck every payday and give you back 15% with no interest when you file your taxes next year. Wouldn't you slap him silly? Wouldn't you tell him that since you know you will only have to pay 15% in taxes, then just take out 15% every payday instead of 30%?

Taxpayers: GET OUTTA THE BOX!!!

OP, if the IRS said he would get it all back then he will. If she did not contribute to taxable income nor pay in any taxes, then the IRS has nothing to garnish from her.