Get Out of Debt Guy

Will They Take My Tax Refund to Pay a Doctor Bill?

Posted June 21, 2013

WRAL Reader Question

Dear Steve,

I had a doctor bill the was done in 2009 and now they are now taking my taxes to pay the bill.  Can they do that at this time? But they went a long time and have not said anything about it until now.

By law can thay take my tax money at the end of the year?


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Dear William,


I'm not sure how they would intercept your tax refund to pay a private doctor bill.  There is clearly more to this story. Either this was a debt owed to the federal government, it is a scare tactic by a collection company or maybe it is part of a child support issue.

But if you think you will get a big tax refund that can be intercepted at some point in the future the easiest way to handle this is to adjust your withholdings so you put more money in your pocket each month when you need it most and then get little back in a tax refund.

Many people use their tax refunds like a savings account. They have too much taken out each month and then get a big refund check and look at it like "free money." That's not a smart thing to do. Essentially you give the IRS your money for free and miss out on saving that each month for emergencies and/or retirement.

I would suggest you talk to whoever is trying to collect these funds and come up with a mutually agreeable repayment plan you can consistently afford with your other monthly obligations. If that's not possible then maybe this debt is part of a larger amount you owe and in that case considering bankruptcy would be a logical thing to do.


Steve Rhode
WRAL Get Out of Debt Guy

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  • URADA Jun 25, 2013

    lilybell is correct. My friend had this happen years ago when she gave birth at UNC. She was uninsured and they took her NC refund checks until the amount was paid off.

  • lilybell Jun 24, 2013

    Publicly funded hospitals like UNC can do this with state tax refunds -- that is probably what this person is talking about. If this person was uninsured and treated at UNC, there are both hospital and doctor charges. They can legally take your state income tax refund as payment toward these charges.

  • jenjengirl89 Jun 24, 2013

    Dear William,

    Why have you not been making any payments toward this doctor bill that you clearly owe? Because "they went a long time and have not said anything about it until now" doesn't indicate that you don't owe them payment. Why not just pay your debts since you are employed?

  • BubbaDuke Jun 24, 2013

    Collection agencies are another scourge to society. They rank just above pedophiles and liberals in value to humanity.

About this Blog:

Steve Rhode has had careers in opthalmology, real estate and as the head of a nonprofit debt counseling firm. On his blog, he offers hard-won, free advice about getting out of debt, consolidation and making the right choices as you manage your money.