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Can a Private Creditor Garnish the IRS for an Income Tax Refund?

Posted by attorney Kelly Karstaedt

By: Kelly A. Karstaedt, Esq.

Isn’t tax season a wonderful time for creditors seeking to collect on a judgment? A time when all that money flowing from the federal government to debtors could go straight into your pocket. Or can it? Can you garnish the Internal Revenue Service (“IRS") in order to take that refund check before the debtor gets a hold of it and the money disappears?

The answer is: NO. A private creditor cannot garnish the federal government for an income tax refund. The idea that the IRS cannot be garnished is based on the federal government’s sovereign immunity stemming from Article III, Section 2 of the U.S. Constitution. The idea of sovereign immunity was first clearly discussed by the courts in United States v. Clark, 8 Pet. (33 U.S.) 436, 444 (1834) where the Court stated that the United States was not suable as a common right. Subsequent case law has established that the federal government, including all of its departments and agencies, are immune from suit unless said immunity has been waived. Specifically, the IRS cannot be sued without the express authorization of Congress. Blackmar v. Guerre, 342 U.S. 512, 514-15 (1952). The term “sued" has been interpreted to include acts of garnishment.

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