Today TaxMama hears from Michael in California with a sensible question.
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“I have a federal tax liability from past years. For 2009 I own the feds $1,000. I have a refund due from the state of California of $1,700. The state will apply my return to the past liability. Is there any way that I can get CA to apply my refund to the current tax year liability, instead of the past debt?”
Do you really think you have any control over such things?
Actually, I don’t think California still has an agreement with IRS.
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You may be getting your refund – someday. Then you can write a check to IRS.
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However, if California’s agreement is still in effect, IRS will apply the payment to your oldest debt.
Kind of like credit card debt. They apply your payments to the lowest interest debt first… leaving you paying on the higher interest rate. (Read TaxMama’s AccountingWeb.com article about credit cards )
Good try, though. I like the spirit.
And remember, you can find answers to all kinds of questions about how your refunds are grabbed and other tax issues, free.
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Where? Where else? At www.TaxMama.com .
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