I wrote about the last time the state “intercepted” our income tax return here: What Arizona did with our 2008 Tax Refund and here: Finally – Our 2008 Tax Refund Arrived.

I filed an extension for our 2011 taxes and when I bought my car off Craigslist I forced myself to get it done sooner than later since I want to get our line of credit paid off, since that’s where I had to take the money from in order to buy the car using cash.  I had originally anticipated getting back close to $3600 because Mr. A’s business really struggled last year.  But as I was looking at our various side incomes for this year I could see that we were already liable for some estimated taxes for this year. So we decided to leave $2000 with the IRS and $200 with the state.  This meant we were expecting only $1400 back, which is not enough to cover the cost of my little car, but close.  If things keep going as well as they have been for the first three quarters of this year, we will probably end up owing several hundred dollars next April, so I would rather owe a few hundred than a couple thousand!

Yesterday I got a text message from Mr. A telling me a letter came from the IRS.  Uh oh.  That freaked me out a little bit. He’d left the envelope in the mailbox so I went out to retrieve it and I was both relieved and annoyed to see that it wasn’t actually from the IRS but from our very own Arizona Department of Revenue.

The letter was to inform us, “We used some or all of your 2011 refund to pay outstanding liabilities.”

That’s $421 of our money not coming back to us anytime soon for no good reason.

Let me back up. About 17 years ago Mr. A had some traffic tickets which he did not take care of in a timely manner.   As time went by, his driver’s license was revoked. For many years he did not own a car and he did not drive.  In 2005 – seven years ago now – he decided it was time to get things straightened out and get his driver’s license so we went through a lengthy and tedious process to get it all straightened out.   The Department of Motor Vehicles would not allow him to have a driver’s license unless everything was fixed, so I know there is nothing outstanding.  Furthermore, there was nothing outstanding when the State of Arizona “intercepted” our income tax refund in 2008, and yet they sent part of the money to this very same justice court.

In 2008 it took me from January until May to get OUR money back.  To add insult to injury, we never did get the full amount of our refund back, they kept $5.94.

The refund we have already received (minus the $200 that I applied toward our 2012 taxes and the $421) is $336 back, but who knows how long it will take to get the rest of our refund back from them this time.   I hope not as long as it took in 2008!

I’m reading over the letter again now, and it says “If your Tax Refund has been withheld in error by a court or agency, you have 30 days from the date of this letter to file an appeal with the court or agency claiming your refund to be entitled to the full refund, plus interest and penalties, per ARS 42-1122.”

Hmmm… interest and penalties?  We’ll see how that goes but I am definitely appealing this error.

I last asked this question of my readers in 2008 and I cannot believe I’m asking again, have your taxes ever been “intercepted”?