What Happens If I Do Nothing
Adverse Action Notices and the Tools Available to Government Agencies
If you are a party to a statutory, commercial or trust relationship with any government agency, that government agency must notify you when they are planning on taking any adverse action against you.
Depending on the regulations that govern a government agency and whether it is state or federal, that particular agency may have access to 1 or more of the following debt collection tools (adverse actions):
1. Wage Garnishment
2. Tax Refund Offsets
3. Bank Account Offsets
How Each Agency Collects
IRS
The IRS can use all three adverse action tools to collect on a tax debt.
Social Security
Social Security will typically reduce a person’s benefits by 50% as their adverse action but may also use the Treasury Offset Program. But Social Security cannot garnish wages or offset bank accounts when there is an overpayment.
Student Loans
Federal student loan providers like Nelnet (acting on behalf of the Department of Education) can utilize wage garnishment and the Treasury Offset Program (TOP) for tax refunds, but they generally cannot directly offset bank accounts without a court judgment.
Unemployment Agencies
State unemployment agencies have the ability to garnish wages, utilize the Treasury Department’s TOP program to offset a beneficiary’s tax refund, but they must get a court order if they want to freeze and take up to the full amount of the overpayment from a beneficiary’s bank account.
Book A Free Consultation!
If you have received an adverse action notice from a government agency (you have 30 days to appeal or block the adverse action) or you have received notice that you are out of administrative options, then you can take advantage of a free consultation with a Sr. Solutions Manager at REKTIFIRE who can answer all of questions and suggest solutions that fit your situation and goals. Click the Free Consultation button below: