Apr 18, 2008

Q & A: Alabama Tax Refund Grabbed By IRS?

QUESTION: If you owe the IRS money and currently making installment payments and you get a refund on Alabama State tax return, do you get the refund or do they apply it to the federal taxes owed?

ANSWER: Great question. According to the Alabama Department of Revenue, Alabama income tax refunds are not currently subject to seizure by the IRS to pay down federal tax liability. Many states do have this arrangement with the IRS, but Alabama is not included. But there are rumblings in the Alabama state legislature to change the law and allow the IRS to take refunds for past due taxes. Maybe it's time to write your state legislator!

2 responses:

Anonymous,  April 21, 2008 at 10:04 PM  

WOW ! Thanks for expounding on Jim; NC does not apply to this !

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