Federal Garnishment of State Debts

Harry J. Rubin, Deputy Attorney General,

The Federal Internal Revenue Service has levied upon accounts payable by the Commonwealth to vendors who owe Federal taxes. The service also has indicated that it intends to levy upon refunds due to taxpayers from the Board of Finance and Revenue of the Commonwealth. The question arises as to whether or not the Commonwealth should honor these levies.

The Internal Revenue Code of August 16, 1954, 26 U. S. C. §6332(a), 68 A. Stat. at L. 784, states as follows:

“Any person in possession of (or obligated with respect to) property or rights to property subject…