Refund Delayed, Liability

[geekgirldany]

Client did not receive refund and they went to Where is my refund. A message come up:

There is a delay in processing your refund. This is related to an outstanding tax liability on another account.
Please mention reference number 1341 to the IRS Customer Service Representative.

I know the clients very well. They do not know of anything they would owe on. No student loans, back child support.

What other accounts owed on would delay a Refund?

He called the IRS and they told him about the same thing. Would not say what the account is. Only they would get a letter, there would be a "grace" period, and if they did not owe it then the refund would be sent.

Would appreciate any input from the forum on this and if you have encountered this yourself.

Would I get any more information getting a POA and downloading transcripts?

[Burke]

Could be unpaid state taxes if they have reciprocity agreement with that state.

[geekgirldany]

I've been doing their tax returns for years and they do not owe any past state taxes.

Wife did say that there were some ID Theft issues at bank but they thought it was one that affected many people. Their debit card had to be changed.
I am not sure if that has something to do with it or not.

Will the letter they receive list the account they supposedly owe on?

[taxmandan]

Have them sign a Form 13 for FMS and call the number for tax offsets, that will tell what agency is wanting their refund. Most common is the state Child Support Division, but recently I found out that some state courts are going after refunds to cover traffic fines of large amounts.

[rjholmes]

The same thing happened to one of my clients. They received their check in about 3 weeks even though we had requested direct deposit. I read on another forum that it has happened to others too. Apparently no reason is given, and it seems to be random.

[Koss]

Collections

I can't speculate on the specific circumstances of GeekGirlDany's client, but I did have one client a couple years ago who had an interesting story...

$25 of his state tax refund--from the Ohio Department of Taxation--was taken to pay a delinquent medical bill. It was a co-payment.

How, you ask, could a doctor's office grab a state tax refund?

The health care provider was a clinic that was part of the medical center at The Ohio State University.

When the bill went 180 days past due, the university turned it over to the office of the Ohio Attorney General for collection.

It was a debt that the taxpayer owed, and the creditor was the State of Ohio. The Ohio Attorney General, acting as a collection agent for the state, has statutory authority to sieze a state tax refund to satisfy such a debt.

BMK

[geekgirldany]

Well... it could really be from anything then. I will download the Form 13 and call to see if there is anything there they might not know about.

I've been looking at other tax forums and it appears this is happening to other taxpayers as well as rjholmes said. No reason given and refund was ultimately received from 3 to 6 weeks later.

I'll tell you what I find out. Client did say the IRS told them it was a "random selection" and if they did not owe anything on the account then they would process the refund. Seems strange.