California family courts take non-payment of child support very seriously. The state’s child support agencies follow the federal guidelines for enforcement including the Treasury Offset Program (TOP). This program offsets the tax returns of American taxpayers who owe debts to government agencies, including child support. In 2022, TOP recovered over $5.2 billion in unpaid debt, including child support.
If you are under a court order to pay child support, it’s important to understand that non-payment automatically triggers several enforcement actions, including the seizure of tax return payments. If you experience a significant and ongoing change in financial circumstances making it difficult or impossible to pay the amount of your child support order, it’s essential that you file a petition to modify the order instead of simply failing to pay. A Los Angeles child support lawyer can help you to better understand the modification process and your rights and obligations under the law.
Under What Circumstances Can the IRS Divert My Tax Refund for Child Support?
According to California law, each county must submit a monthly report to California’s Franchise Tax Board (FTD) detailing those child support accounts that are in arrears once the payer has missed one or two payments. This board typically takes immediate action. Not every child support account in arrears faces an interception by the IRS. When the parent who is a child support recipient also receives state benefits in California, the state can divert the federal tax return into the child support account once it’s $150 in arrears.
If the recipient does not receive state benefits, the IRS can only take a tax refund toward back-owed child support if it’s over $500 in arrears. In either case, the parent who falls behind on their child support payments will first receive a “Delinquent Debt Notice” warning them that they’ve been flagged for an offset of their refund into the child support account. In California, both state and/or federal refunds can be offset for delinquent child support.
If you’ve received a notice that your refund may be diverted, there are several actions you can take, including contesting the state’s action.
What to Do If You Receive a Delinquent Debt Notice
If you’ve been issued a notice of delinquent debt from the IRS, you may wish to speak to a Los Angeles family lawyer about your rights and responsibilities. If you feel the notice is in error, you have several options for contesting. Some common reasons child support-paying parents may contest a notice from TOP include the following:
- They’ve paid the debt in full and have records to show their payments
- They can provide evidence that the debt is an error or the result of identity theft
- They may show proof of a sudden disability or severe medical condition that impeded their ability to pay
- They can prove they’ve suffered a significant financial hardship
- They may show that their child has turned 18 or is no longer living at home
Paying parents typically have 10 days to contest the notice before the information to offset a refund goes to the IRS.
What If I Filed a Joint Tax Return With a Current Spouse?
When couples file a joint tax return, the state and federal agencies do not consider the spouse responsible for the parent’s child support debt. The spouse can file an “Injured Spouse Allocation” form, or form 8379, so the IRS will send the spouse’s portion of the tax return instead of offsetting it into the child support account. The spouse can file this form with their taxes or after they receive a notice of offset.