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  1. #1
    Join Date
    Feb 2009
    Posts
    1

    Default File Single to Avoid Federal Offset

    I am currently having my taxes offset by the dept of Edu for student loans. Which has been ok because it was getting them tidied up quicker than I could making pmts. However, we have had some serious setbacks recently and I simply MUST get my return this year.

    I was told the injured spouse form will not help us due to the nature of my husbands income and deductions.

    We are considering claiming his return as either Single or Head of Household because Married jointly loses the return to offset, and Married separately loses EIC (w/o which there is no return to speak of anyway).

    Apparently either status will get us the exact same dollar amount. Unsure why as he would get the Addtl Child credit if he is "single" and will not if he's HOH, but that's what the prep software says.

    Anyway, my point/question is this. What are the legal ramifications of saying either? Will the IRS flag us long as I file from a different address? (Do I even have to file as I only earned $7500 myself last year, paid no federal on it and the tax software says I owe 0 and have 0 coming?) What is the safest AND most beneficial thing to do?

    (OH, I'm in Indiana)

    Thank you to anyone who can help me!

  2. #2
    Join Date
    Oct 2006
    Posts
    16,474

    Default Re: File Single to Avoid Federal Offset

    Quote Quoting soupysara
    View Post
    I am currently having my taxes offset by the dept of Edu for student loans. Which has been ok because it was getting them tidied up quicker than I could making pmts. However, we have had some serious setbacks recently and I simply MUST get my return this year.

    I was told the injured spouse form will not help us due to the nature of my husbands income and deductions.

    We are considering claiming his return as either Single or Head of Household because Married jointly loses the return to offset, and Married separately loses EIC (w/o which there is no return to speak of anyway).

    Apparently either status will get us the exact same dollar amount. Unsure why as he would get the Addtl Child credit if he is "single" and will not if he's HOH, but that's what the prep software says.

    Anyway, my point/question is this. What are the legal ramifications of saying either? Will the IRS flag us long as I file from a different address? (Do I even have to file as I only earned $7500 myself last year, paid no federal on it and the tax software says I owe 0 and have 0 coming?) What is the safest AND most beneficial thing to do?

    (OH, I'm in Indiana)

    Thank you to anyone who can help me!
    What you are proposing to do is EIC fraud. The ramifications of EIC fraud is having to pay back the refund, with penalties and interest, and being further penalized by not being allowed to claim EIC, on any tax return, for any child, for the next 10 years.

    The safest thing to do is to file a joint return with an injured spouse form, and accept the situation as it is.

    You get a refund if you qualify for one based on your legal filing status. It is not an entitlement.

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