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#1894849 - 02/07/14 04:18 PM Tax Refunds
CrashDavis Offline
Gold Star
Joined: Jun 2005
Posts: 283
I think I know the answer but want to ask to be sure. If a customer has a tax refund and deposits the refund to their account with the bank whether direct deposited or by actual check, if the customer owes us money from a loan or a charged off account, can we use those funds to recover our loss?

I know you cannot use a social security fund.

Thanks

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Deposits and Payments
#1894905 - 02/07/14 05:01 PM Re: Tax Refunds CrashDavis
Doug Hendrickson Offline
Power Poster
Doug Hendrickson
Joined: Oct 2009
Posts: 3,927
Follow-on with a different scenario:

If the refund is actually trying to be posted to the account which is charged off, can we accept it as payment for the charge-off or is this account considered 'closed' for that purpose and we have to return the funds?

FOUND MY ANSWER: previous threads indicate that the account is considered closed and we must return the tax refund.
Last edited by Doug Hendrickson; 02/07/14 05:07 PM.
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#1894929 - 02/07/14 05:22 PM Re: Tax Refunds CrashDavis
Elwood P. Dowd Offline
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Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
The right of set-off is governed by state statute and state court decisions. It is oftentimes enhanced by contract terms.

I can tell you that a federal income tax refund does not have the same protections afforded to federal benefit payments. However, no one can responsibly say that you have a right of offset unless they are familiar with all of the above mentioned resources.
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