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Copely v United States In this May 2020 upset case for Debtor’s attorney’s throughout the 4th Circuit, the Court allowed IRS set off against Debtor’s tax refund (overpayment) vacating the District Court’s Opinion, which upheld the bankruptcy Court’s Opinion stating as well settled 4th circuit law that the IRS could not seize (“set off”) a Debtor’s exempt tax refund (overpayment).

This IRS win may also complicate bankruptcy planning for Chapter 13 and Chapter 13 plans.