Can I sue the Virginia department of taxation for wrongful garnishing my federal tax refund?

Asked over 1 year ago - Newport News, VA

Va Dept . of Taxation ( 804 - 367 - 8031 ) has garnished my federal tax refund electronic deposit this year 2013 stating I owe then taxes for year 1998 and 2002 and I'm active duty military since 1989 - currently . They also stated they have a different last name for me on record however , my SSN and DOB matches so DFAS allowed them to garnish my refund . Now my home of record was IL until 2007 ( no state tax required for AD military ) and 2008 and currently is TN ( no state tax for AD military as well ) but now I have to request 1998 / 2002 LES and W - 2s from archives to prove my home of record . I have never been required to pay any state tax legally therefore this seems wrong that all of a sudden this would happen and properly happening to others . I have NOT received from any agency about this before .

Additional information

Correction, I meant to say the IRS instead of DFAS. Also, I never received any correspondence about such a debt. It's not even on my credit reports as a collection.

Attorney answers (3)

  1. Rixon Charles Rafter III

    Contributor Level 20


    Lawyer agrees

    Answered . Can you sue the state? Yes.
    Can you win? No. In fact, your case would be dismissed almost immediately. (The State is immune in suit--on grounds of Sovereign Immunity).

    You MAY be able to recover what was taken (and nothing more)--you'll need an attorney with expertise in the Commonwealth's tax code--if that attorney had an understanding of LESs and DFAS it wouldn't hurt. Youu'll need to document your home of record was properly recorded with DFAS on your LESs. Inshort you will have to prove the state wrong--it’s doable, but not easy and there will be some cost inolved..

    READ THIS BEFORE CALLING OR EMAILING ME: I am licensed to practice before the state and federal courts in Virginia.... more
  2. Charles Ross Smith III

    Contributor Level 16


    Lawyers agree

    Answered . Regrettably, the doctrine of "sovereign immunity" prevents such a suit. This doctrine is sometimes stated as, "The king can do no wrong." It applies t the State of Virginia.

    However, that does not mean that this matter can not be fixed. You're just not going to get any extra money out of this situation. You are going to need a tax attorney or a CPA to get you ID and your taxes straightened out. I will wait to see my tax attorney brethren chime in with helpful thoughts on fixing your problem. Good luck.

    Don't forget to click on the "Best Answer" button, if you appreciate this wit and wisdom. This answer is not... more
  3. Alexander Izaak Bozof

    Contributor Level 9

    Answered . You should file an appeal of the matter with the Virginia Dept of Taxation. The appeal process is described in the Virginia Taxpayer Bill of Rights You generally have 30 days from the date of the collection action.

    As the document I linked above states, you have 30 days to file the appeal -- which is the administrative appeal. You have no limitation on filing a lawsuit in state District court, and yes, you can win. Dept of Taxation actions are not subject to "sovereign immunity" and I regularly win these kinds of lawsuits where the collection action was inappropriate. Moreover, the state usually settles out of court once filed.

    If you can prove you were never in Virginia as a resident, then Virginia has no authority under state law to levy you, and yes, if you can show you were not a resident, then you will win.

    What has happened most likely (tipoff: Name mismatch) is that someone is using your SSN illegally. This is not uncommon, as many illegal immigrants are buying credentials to use in order to get work. You should get credit reports for yourself from all the credit agencies and contact the Social Security Administration to determine if someone is using your SSN.

    The legal information presented at this site is for informational purposes only and should not be construed to be... more

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