Solved: I was owed money on my few previous state tax returns, but I owed my school money, and the money has been held. This year I paid off the balance, how do I collect.
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I was owed money on my few previous state tax returns, but I owed my school money, and the money has been held. This year I paid off the balance, how do I collect.

 
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Level 15

I was owed money on my few previous state tax returns, but I owed my school money, and the money has been held. This year I paid off the balance, how do I collect.

Any tax refunds that were kept would have been applied to the debt and reduced the total amount you owed.  If you feel the bank did not credit you for the amount of your tax refunds that were held back, you would need to start by checking your account at the bank or lender, and working with them to show them proof of offsets that were collected, etc. and make sure they gave you proper credit in your account.

The agency that administers the offset program is called the Bureau of Fiscal Services or BFS.  If your bank does not give you satisfaction you can call the BFS.  https://www.irs.gov/taxtopics/tc203.html

Ultimately you may need to sue your bank if the BFS says they paid the bank and the bank won't credit your account.

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*

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4 Replies
Level 15

I was owed money on my few previous state tax returns, but I owed my school money, and the money has been held. This year I paid off the balance, how do I collect.

Do you mean your refunds were offset by delinquent student loans?  You do not get that money back.
**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
New Member

I was owed money on my few previous state tax returns, but I owed my school money, and the money has been held. This year I paid off the balance, how do I collect.

It wasn't student loan related.  The letter that I got from the state said Until I paid off the bill, the money wouldn't be released.  The refund wasn't applied to the debt at all.
Level 15

I was owed money on my few previous state tax returns, but I owed my school money, and the money has been held. This year I paid off the balance, how do I collect.

If that was a state tax issue then you need to call the state.
*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
Level 15

I was owed money on my few previous state tax returns, but I owed my school money, and the money has been held. This year I paid off the balance, how do I collect.

Any tax refunds that were kept would have been applied to the debt and reduced the total amount you owed.  If you feel the bank did not credit you for the amount of your tax refunds that were held back, you would need to start by checking your account at the bank or lender, and working with them to show them proof of offsets that were collected, etc. and make sure they gave you proper credit in your account.

The agency that administers the offset program is called the Bureau of Fiscal Services or BFS.  If your bank does not give you satisfaction you can call the BFS.  https://www.irs.gov/taxtopics/tc203.html

Ultimately you may need to sue your bank if the BFS says they paid the bank and the bank won't credit your account.

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*

View solution in original post

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