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Can Federal Debts Be Removed?


amandal0514
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The last post in this topic was posted 2388 days ago. 

 

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A friend of mine has one negative item left on her reports and it's a federal debt from being overpaid while in the military. She's been out of the Army since 2007. The debt is for $7k (was originally $13k). She hasn't made any payments directly but each year they take half of her and her husband's tax return and put towards it so that shows as a payment.

 

Is there any way to negotiate a settlement and get it removed? Or to dispute and remove? I don't have any experience with anything like this.

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A friend of mine has one negative item left on her reports and it's a federal debt from being overpaid while in the military. She's been out of the Army since 2007. The debt is for $7k (was originally $13k). She hasn't made any payments directly but each year they take half of her and her husband's tax return and put towards it so that shows as a payment.

 

Is there any way to negotiate a settlement and get it removed? Or to dispute and remove? I don't have any experience with anything like this.

Federal debt never goes away.

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Federal debt is not the same as "consumer debt". There is no legislative SOL. To negotiate any type of settlement or alternate payment arrangement, you have to deal with the agency that originated the debt. These agencies often have an ombudsman who may be able to help. I'm not familiar with the Army. I would try and find their OMBud and work out repayment.

http://www.dfas.mil/contractorsvendors/phonenumbers.html

 

 

Examples:

Federal Taxes - IRS

Child Support - State Enforcement Agency

Student Loans - (Federally Backed) - Department of Education or State Agency

Edited by tmcgill
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If they have been taking the payments from tax returns it is most likely been referred to the US Treasury. They call it the Treasury Offset Program. There is no SOL which is a total violation of due process. But they make the rules.

 

From what I understand they do not negotiate. Why would they when they can go after you forever. They can also file an Administrative Wage Garnishment without a judgment.

 

Sorry for the crappy news on this post.

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My advice would be to payoff and then try to dispute the record of it off the credit bureaus. It's a small amount of money and could probably be settled for 3-4k.

Nope. Government doesn't settle for anything. They know they can either take it from you or jail you.

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If they want, they can slow down what the government takes from their tax returns. The government will return the portion of the tax refund that is attributed to the spouse.

 

https://www.irs.gov/uac/form-8379-injured-spouse-allocation

 

Form 8379, Injured Spouse Allocation. The injured spouse on a jointly filed tax return files this form to get back their share of the joint refund when the joint overpayment is applied to a past-due obligation of the other spouse.

 

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If they want, they can slow down what the government takes from their tax returns. The government will return the portion of the tax refund that is attributed to the spouse.

 

https://www.irs.gov/uac/form-8379-injured-spouse-allocation

 

Form 8379, Injured Spouse Allocation. The injured spouse on a jointly filed tax return files this form to get back their share of the joint refund when the joint overpayment is applied to a past-due obligation of the other spouse.

 

 

It is impossible to take anything from a tax return.

 

A tax refund, yes. A tax return, no.

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If they want, they can slow down what the government takes from their tax returns. The government will return the portion of the tax refund that is attributed to the spouse.

 

https://www.irs.gov/uac/form-8379-injured-spouse-allocation

 

Form 8379, Injured Spouse Allocation. The injured spouse on a jointly filed tax return files this form to get back their share of the joint refund when the joint overpayment is applied to a past-due obligation of the other spouse.

 

 

It is impossible to take anything from a tax return.

 

A tax refund, yes. A tax return, no.

 

True. But, you knew what I meant.

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How do military overpayments even happen? I thought E2,E3,etc were all set pay (hazard?). I'm kind of appalled by the fact that a veteran would have to go through this...

 

But yeah, federal sticks like glue unfortunately.

who's ever doing payroll screwed up?

 

you get your base pay based on Rank and time in grade. and then the extras are added. *combat pay, hazard pay* etc. so if you were being paid hazard pay, and were not in a situation that warrants it. you will owe. my situation was the opposite they owed me. Good luck there, takes forever when the govt owes you money.

 

 

otoh to the OP.

 

the govt will not negotiate. if you owe them money, they want it all. I know I see all the IRS settlement claims but not sure how that works.

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Isn't the SOL for federal taxes 10 years.?

taxes, this is govt. payment for service time. almost all govt debts are indefinite.

 

also think about this, unless you go into hiding become an unmarried housewife or work cash jobs for 10 years. your looking at the IRS getting their money

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If they want, they can slow down what the government takes from their tax returns. The government will return the portion of the tax refund that is attributed to the spouse.

 

https://www.irs.gov/uac/form-8379-injured-spouse-allocation

 

Form 8379, Injured Spouse Allocation. The injured spouse on a jointly filed tax return files this form to get back their share of the joint refund when the joint overpayment is applied to a past-due obligation of the other spouse.

 

 

It is impossible to take anything from a tax return.

 

A tax refund, yes. A tax return, no.

 

True. But, you knew what I meant.

 

 

Yes, but I'm on a mission to get people to understand the difference, just like putting dollar signs in the right place.

 

Even the swarthy foreigner I married knows the correct usage of these.

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The IRS is following the garnishment directive given by the agency controlling the debt.

 

**Any negotiation (if remotely possible), payment plan setup - or any other issues will be with the Army.

The goverment agency where the debt originated controls how it is collected.

 

I've heard of others who have setup payment plans through the Ombudsman.

Edited by tmcgill
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If they want, they can slow down what the government takes from their tax returns. The government will return the portion of the tax refund that is attributed to the spouse.

 

https://www.irs.gov/uac/form-8379-injured-spouse-allocation

 

Form 8379, Injured Spouse Allocation. The injured spouse on a jointly filed tax return files this form to get back their share of the joint refund when the joint overpayment is applied to a past-due obligation of the other spouse.

 

 

It is impossible to take anything from a tax return.

 

A tax refund, yes. A tax return, no.

 

True. But, you knew what I meant.

 

 

Yes, but I'm on a mission to get people to understand the difference, just like putting dollar signs in the right place.

 

Even the swarthy foreigner I married knows the correct usage of these.

 

I know the usage too.

 

Other people's missions are of no concern to me. Unless, I hear about them and decide to start throwing things out there just to keep them busy. :dntknw:

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