Need Advice! It wasn't my fault!

[jpparker07]

So long story short I have been fighting with a certain unnamed University about an overpayment of financial aid. I graduated in December of 2011. After a YEAR they finally realized that I don't owe money and they actually owe me money. How funny right! It has been a long battle over a mistake of theirs that was completely not my fault. So now I have a collection from the government of the state I live in on my credit report after all my hard work. AND if I file my taxes before the school notifies the state agency that I don't owe a debt they will collect my tax return and I know once its gone I will not get it back.

Now due to personal reasons I have to file my taxes ASAP but the school is saying that the state agency will be notified "some time next month that I don't owe a debt". That isn't really acceptable and I'm wondering if anyone has any advice for me. I do have an email from the school saying that I don't owe money and that my account has been resolved. Can I send that to the agency? I feel like a dispute or DV would take too long. Any advice would help! Thanks!

[GregB]

You probably won't be able to file your taxes soon anyway. The IRS is such a mess due to the incompetence of the current government that most of the forms are not even finalyzed yet. Check out what forms you need and see if they are done yet.

How about: Go to small claims and file suit against the school. Try to get the forms so you can serve them ASAP. Name the person you have been dealing with personally in addition to the school. Go after them for damages and it is up to them to try to mitigate the damages.

[RobertEG]

Yes, if due a refund, they may cross-check if you have any outstanding financial obligation to the state before sending you any $$.

I would include a letter with your tax return explaining that the asserted obligation has been discharged.

If they still offset any refund by applying it to an allegedly outstanding "debt," you have sound documentation to support a civil action asserting negligence on their part.

[jpparker07]

From what I read filing taxes was only delayed until the 17th of this month. My returns are actually easy to file electronically since I'm young and don't have properties, big investments etc.

[dmorey]

I would include a letter and a copy of the email with the filed return. I'd suggest mailing not e-filing so you can do that. Then I would probably call after a couple of weeks and see if everything is on track. You can also call the IRS offset department and have a chat with them about the scenario. If they process your return and offset that money anyway, it won't be fully processed until probably summer (I know because we have an offset situation too) so if it takes a long time, call them again. Also, once it's offset there is a short window where that money sits with the IRS before they send it so you could call and explain the situation again between when an offset happens and the money is sent to whoever they plan to send it to. Last year, we had money offset that should not have been. I called and they manually processed the refund so it is possible, but you'll have to really stay on top of what is going on.