Ok so, this is not directly my issue but rather my parents I I find it utterly ridiculous to the point that I just can't believe situations like this exist. Im so aggravated by it that I am seeking counsel for them ( they are trying to figure out what to do as well) but I'm one of those aggressive people. In any case my father received a call from the IRS this morning asking for my mothers name? They then told them that the State is witholding money because of a bounced check ($1300)for a newly registered car like 14 years ago. Long story short, the IRS supposedly had been "looking for my father for 14 years" to confirm and receive payment. Here are the facts: My parents never owned this car. Ever. My parents( much like everyone else) file taxes every year. They did not even bank with the creditor on the supposed check. My parents did not even live in the county where the bank is. The IRS cannot seem to manifest any records or copies to legitimize their claims. They advised my father to contact the DMV to see if they have a copy of the check. Also Im pretty sure you cannot buy/drive anything if you owe the DMV money for anything. What should we do? Help.. My sister has graduation soon and they have deadlines to meet. Im not at all well read or versed in Fed laws regarding issues like these and we sure can't afford a lawyer to help with the litigation process because Im sure everything that they are doing is illegal.

I do not know anyone who has ever been called out of the blue by the IRS. That's what the US Post Office is for.

How did IRS get involved in this if the State has the problem?

I'd be very surprised if "everything" they (the IRS) is doing is illegal - I see an attempt to collect on a debt. Your parents have been told what to do to clear this matter up. Have they contacted the bank and asked the appropriate questions?

You are or are not seeking counsel - you appear to be saying both.

This is not making a lot of sense.

The IRS (Internal Revenue Service) is a Federal agency. Departments of motor vehicles (DMVs) are state agencies, involved with vehicle and driver licensing. I am not understanding how one has to do with the other.

It is possilble, I guess, that your parents are believed to owe the DMV in your state for a bounced check and the state is trying to put a hold on their income tax refund. Is that perhaps what this is about?

I highly doubt that the call was from the IRS. Probably a debt collector. They are notorious for contacting anybody and everybody they even think might be the person who owes.
The first thing to do is find out of any funds in their bank will frozen or not.