Q: On federal probation,given restitution order, but also owe back state taxes. Who gets my tax refund 1st; victims, or IRS
Thanks for taking my question. I have just been sentenced to federal probation and ordered to pay restitution to an injured party. However, I also owe money in back taxes to the state of Illinois for unpaid taxes from 2021. A condition of my probation is that I file a tax return this coming spring. If I am issued a tax refund, who will be entitled to it first: will the government seize it to pay for my restitution, or will the IRS take it for the state of Illinois, to which I owe back taxes? Thanks
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A:
When you file your tax return and are issued a refund, the government will prioritize payments based on the specific laws and regulations governing your situation. Typically, the IRS will apply your federal tax refund to any outstanding federal tax liabilities first. Since you are on federal probation and have been ordered to pay restitution, the federal government may then allocate your refund to fulfill your restitution obligation.
After federal obligations are met, any remaining refund might be intercepted by the state of Illinois to cover your back taxes. The order of priority generally places federal obligations, including restitution, ahead of state tax debts. This means that your tax refund is likely to be used for restitution first, with any leftover amount going toward your state tax debt.
It is important to stay in communication with your probation officer and consult with a tax professional to understand how your specific obligations will be handled. This can help you prepare for how your tax refund will be applied and ensure you are meeting all your legal and financial responsibilities.
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