- quote -

Sorry for not making myself clearer. The state initiates
and releases the freezes. Period. I didn't mean to imply
that they could take care of other problems, especially
injured spouse. The reason I suggested the state was that I
had the idea that you were no longer in arrears, thus there
shouldn't be any freeze.

Phil Marti
Topeka, KS

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"Phil Marti" <philmarti[at]aol.com> wrote:
- quote -

I appreciate the advice however, here is what I have now
been told after following up with the state:

The state child support enforcement agency tells me that
they are forbidden by law to tell me anything about my
diverted tax refund and that I must contact the county
social services agency.

The county social services agency tells me that although
they are allowed to discuss the situation with me, they
cannot help me. They tell me that my only recourse is to
contact the IRS regarding my wife's Injured Spouse form.

The county agency can only do what the IRS directs them with
regard to my wife's portion of the refund. In any case,
they also told me they hold the funds for 6 months before
sending it to my ex, so likely the IRS will act before then
(we can hope), and request my wife's portion back from the
county. At that point when the county returns the funds to
the IRS, the IRS will then return it to my wife. If the
request from the IRS comes after the county send the funds
to my ex, they will have to request it back from her. That
would be an ugly situation in itself!

The good news is that at least my account with the state has
been credited for the amount the IRS originally (but
incorrectly) diverted. The thing that amazes me is that all
of this is for a couple of hundred bucks, and despite all of
the time and consequent money spent to collect and deal with
this by all of these parties, it sits in the county's bank
account and does no one any good (least of all my son, who
could use the money), and will then be returned to my
current wife anyway, who has no fault in any of this (except
maybe her selection of husbands ;-).

Mike Cook
Colorado, USA

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philmarti[at]aol.com (Phil Marti) blurted out
- quote -

Right. And don't wait to see if they ever get around to
crediting it to your balance. If they haven't done it yet,
they may not unless you bug them. They're busy, and since
it was not "supposed" to happen that way, they may be acting
as if it didn't.

Stu

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"Mike Cook" <mpcook[at]earthnet.net> writes:

- quote -

The place to fix this is with the state child support
enforcement agency. They, and only they, can freeze your
refunds or release that freeze.

Phil Marti
Topeka, KS

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"Stuart O. Bronstein" <stu[at]lexregia.com> wrote:

<snip> a legitimate reason for doing so. If he makes a payment
- quote -

This is not always the case, as in my situation. I have a
payment plan, which I stick to religiously, with the state
agency monitoring child support payment, and a court order
that addresses the IRS not diverting my tax refunds, and my
refund for 2002 was taken by the IRS anyway. Between my CPA
and my attorney, we decided the cost to fight was greater
than the benefit so I let them "keep it". I am still
waiting for the diverted refund to be credited to my account
with the state, so that so far, they really ARE keeping it.
Our CPA filed the injured spouse form for my wife, however,
we're waiting for a response to that as well. I am not very
hopeful about any of this.

Mike Cook

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"D. Stussy" <kd6lvw[at]bde-arc.ampr.org> wrote:
- quote -

No WE don't. You assume it was properly done, you assume
advance EIC may have factored in, in fact in this instance,
you assumed quite a few things.

--
David M. Woods, EA
Boston, MA 02109

Postings here are general information only and not to be
relied upon as advice.

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Dave Woods, EA wrote:
- quote -

Since the withholding computation factors in these credits
(and for EIC, even suggests EIC advance payments) when
PROPERLY done, we DO know that.

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"Gene E. Utterback, EA" <eagent[at]alliancetax.com> wrote:

- quote -

I think too many people focused on the source of the debt
instead of focusing on it AS a debt. If it were an
outstanding tax debt from a prior year I suspect some of the
responses might have changed. Similarly, if it were unpaid
alimony, I suspect most of the responses from men would have
been different :-)

However, and this is in response to another of your posts,
Gene, you are right on the money with respect to filing
separate returns in this instance. I had a new client a
couple years back who admittedly had cash flow problems. He
wanted to file separate returns so his AGI would remain low
and he could pay on the income contingent plan on his
student loan. That's all well and fine except that now
their overall tax more than offset the cash he didn't have
to front to pay the loans which also included the loss of
the ability to even deduct the interest he was paying on
those loans.

--
David M. Woods, EA
Boston, MA 02109

Postings here are general information only and not to be
relied upon as advice.

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"D. Stussy" <kd6lvw[at]bde-arc.ampr.org> wrote:
- quote -

No you DON'T know they are being over withheld. You know
there is a large refund. That's it. No dollar amounts were
ever mentioned. For all we know, the entire refund is EIC
and/or additional child tax credit and there was zero
withholding. I stand by my comments. If you don't see the
tax return and W-2's, you can't just say to reduce
withholding.

--
David M. Woods, EA
Boston, MA 02109

Postings here are general information only and not to be
relied upon as advice.

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"Marisol Crabb" <marisolcrabb[at]cox-internet.com> wrote:

- quote -

It depends on what you mean by help the situation. I have
had several clients in your position and my analysis almost
always returns the same result - filing MFS increases the
overall tax liability to the point where these is little or
no refund coming and puts the clients in the same cash flow
position as if the refund were intercepted and applied to
the outstanding obligation. In which case wouldn't it be
better to let the debt get paid down with the refund rather
than to increase your tax liability, get little or no
refund, and have the debt continue to hang over you?

I appreciate your frustration with the situation. I would
however suggest that you consider a non-tax related
alternative to your situation, namely getting the debt
paid as quickly as possible.

Good luck,
Gene E. Utterback, EA

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Stuart O. Bronstein wrote:
- quote -

True. However, unlike other liabilities, remember what
CHILD SUPPORT is for. Although the [current] spouse isn't
responsible for it, it's still money diverted for the
support of a child of the person he/she married (presumedly
from a prior marriage - the most common arrangement), but
unless there's some sort of mismanagement or diversion as
personal by the custodial parent who gets the support, there
are moral issues here that transcend the financial ones,
such as the child's well being.

It's quite possible that even if the new spouse is legally
correct and wants her refund returned to her, the "snide
remarks" may be because of her moral callousness. After
all, he/she entered into a marriage [usually] knowing that
there were pre-existing children....

- quote -

That much is true.

- quote -

There are generally two reasons why people fail to pay
child support:
1) Their own financial hardship, such as being laid-off.
That's a legitimate reason.
2) They either just don't care about their ex-spouse or
their child[-ren]. That' not legitimate. Too %^$%^*%*
bad. They should not only pay, but pay with INTEREST
(not all states provide for interest on back payments).
Wilful neglect should be penalized.

I don't think we know which situation this case is.

- quote -

Maybe you're in the morality filter - for having one! :-)

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"Dick Adams" <rdadams[at]smart.net> wrote:

- quote -

If tax refunds are being diverted to pay child support,
likely the issue has long since progressed beyond the tax
arena. As many noted in the original responses, filing
separately would eliminate the diversion problem, but likely
end them up in the same place financially due to higher tax.
Unless there is a goal of them not paying the child support,
it therefore makes sense to let them take the refund.
Advice such as reducing withholdings cannot be made as a
blanket suggestion, because you don't know at what rate
withholding is being made, or that it can be lowered
sufficiently. You need to actually see the return and W-2s
before making such a comment.

--
David M. Woods, EA
Boston, MA 02109

Postings here are general information only and not to be
relied upon as advice.

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Dick Adams <rdadams[at]smart.net> writes:

- quote -

I always advise people, paying or not, to adjust withholding
so that there's a small refund or balance due. Few listen.

I'll confess, however, that advising the OP to do so never
crossed my mind. Two issues come up too often for my taste:
nonpayment of child support and manipulating assets so that
potential heirs can shift nursing home payments to Medicaid.
My response to such people, who I suspect are sitting around
in their spare time griping about welfare for the truly
needy, does affect my answer.

I think, however, that my response to the OP was far from
snide. That's no doubt due to the fact that it was my
fourth draft.

Phil Marti
Topeka, KS

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There has been an excessive increase in snide remarks in
this newsgroup over the last year. Many of them just got
deleted so you all only read the ones that got past me.

Of the responses to this specific post, only one suggested
reducing withholding. That one also suggested resolving
the child support problem. Is that not the advice you would
offer a paying customer?

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See Moderator's response in a subsequent post.
--------------
Vic Dura <vpdura[at]hiwaay.net> wrote:

- quote -

What you consider "snide remarks" I consider to be fair
comment based on common sense. If a client of mine wants to
elevate form over substance or to find a loophole that does
not and should not exist, I will clearly tell him so.

Many of us here are giving professional advice and not being
paid for it. You think we should be more tactful to those
who want our services for free than to those who pay us?

- quote -

He has the ability to go into court and have the child
support award modified, if he can convince the judge he has
a legitimate reason for doing so. If he makes a payment
plan and sticks to it, the IRS won't intercept his tax
refunds. Since they are intercepting his refunds, it's not
an unwarranted assumption that he may be paying less than
should.

In addition to that, it seems to me that if there had been
extenuating circumstances, we would have been told. Nothing
of the sort was disclosed.

- quote -

I know you're just trying to help. But I think the comments
you call "snide" are often very appropriate. If they are
off base, the questioner has the right to give us more
information that will both set the record straight and help
evaluate their problem. But based on information given,
very often calling what appears to be a spade, a spade, is
warranted.

- quote -

Damn! Does that mean I'm in the twit-filter?

Stu

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See Moderator's response in a subsequent post.
--------------
- quote -

Morality aside I think Mr. Dura COMPLETELY missed the point
of the responses. The problem is back child support
diverting tax refunds. The owed child support isn't going
away until it is paid. A VERY logical not to mention
practical solution is to let them divert the refund to pay
the child support, and then the problem goes away. I don't
recall any response making personal judgements on the
existence of unpaid child support. Mr. Dura should
understand that sometimes the best solutions are the most
direct ones. Just because he doesn't agree or like the
responses does not make them snide.

--
David M. Woods, EA
Boston, MA 02109

Postings here are general information only and not to be
relied upon as advice.

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"Marisol Crabb" <marisolcrabb[at]cox-internet.com> wrote:

- quote -

You could always tell your husband to pay the child support.

--
D.F. Manno
dommanno[at]netscape.net
"If liberty means anything at all, it means the right to
tell people what they do not want to hear." (George Orwell)

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Marisol Crabb wrote:

- quote -

You always have this option. However I would suggest
consulting with a tax pro about this problem. filing
separately one must divy (divie?) up the exemptions for
children carefully and correctly. AND be aware that some
tax benefits are not available to those filing separately.
Esp child care expenses and the EIC.

One other route you may explore with a tax pro, is to adjust
your own withholding so that you'll always OWE at the end of
the year. Yes, that sounds strange to some, I know. But,
that way you'll get "your" refund during the year instead of
having to depend on the injured spouse allocation.

Make sense?

Cheer$,
Harlan Lunsford, EA in LA

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"Marisol Crabb" <marisolcrabb[at]cox-internet.com> wrote:

- quote -

MFS may or may not help the situation. It depends on a lot
of factors including what kind of credits and deductions you
normally take. Some are limited or taken away completely
when you file separately. We would need more info to offer
an opinion. Another better easier solution maybe to adjust
your withholding so that you get very little back at the end
of the year and more in each paycheck. Then you will get a
larger portion of your "refund" throughout the year instead
of "losing" half of it to CSS. On a different note, and
speaking solely from the standpoint of the sister of someone
owed lots of back child support, I think the CSS program is
great. Parents ought to pay what they owe for child support
and should take that cost factor into consideration when
entering new relationships and having more kids. I'm sure
if you were to split with your hubby (hopefully that will
never happen) you would expect and deserve to have him pay
his fair share of support for your four children. And the
mother of his other kids deserves the same. In short, he
needs to pay up.

Kathy

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Marisol Crabb <marisolcrabb[at]cox-internet.com> wrote:

- quote -

While filing MFS will protect any refund to which you are
entitled, there are many tax credits, deductions and other
benefits you lose by filing MFS.

These include earned income tax credit, education tax
credits, student loan deduction, tuition & fees deduction,
deductibility of rental losses, 85% taxable income from
social security benefits, ability to contribute to certain
IRAs, and many others. And if you are in a community
property state, you might not gain any advantage.

But there are some situations in which filing MFS does
benefit you, including situations where there are high
deductions for medical expenses, casualty losses, and
employee business expenses; where filing MFJ places you
above the threshold for child tax credit but filing MFS
allows to to claim that credit; and, especially in Ohio,
where state taxes would be greatly reduced.

In other words, there is no simple one-sentence answer. You
have to look at it both ways.

But if your concern is that some of your refund will be held
by the IRS to satisfy your spouse's debt, why not arrange to
have less income tax withheld so there is no refund? Be
sure your final tax bill is under $1000 so there will not be
penalty or interest charged to you for underwithholding.

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

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