Asked in Bankruptcy for Alabama

Q: Can the IRS take my tax refund during a Chapter 7?

I owe taxes on 2 years prior to filing chapter 7, and I filed taxes based on income I received prior to filing. No one has lifted the automatic stay, and my case is not yet discharged, but the IRS took my refund, anyway. When i called, they said their system wasnt updated with my BK, but now it was, and that theyd reverse the payment. A week later, i got a notice in the mail saying the refund was taken for back taxes for the year i owed. Isnt this a violation of the automatic stay?

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1 Lawyer Answer
Timothy Denison
Timothy Denison
  • Bankruptcy Lawyer
  • Louisville, KY

A: Yes, they can.

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