Case: Social Security Benefit Withholding Traced to Tax Refund Protected From Bankruptcy (Bankr. M.D. Fla.) (IRC §3402)



July 21, 2022, 5:00 AM

Debtor allowed a claimed exemption of a portion of his tax refund from bankruptcy collection as a Social Security benefit under 42 U.S.C. §407, a bankruptcy court held. Debtor filed Chapter 7 bankruptcy. Debtor listed as income wages and Social Security benefits, in addition to a tax refund. Debtor claimed a portion of the total refund as an exempt social security benefit asserting that he “over deposited from his social security funds an estimated tax deposit,” that the IRS returned the overpayment to him as a tax refund, and that the returned overpayment is exempt because it is traceable to …