Overview
Your tax return may show you’re due a refund from the IRS. However, if you owe a federal tax debt from a prior tax year, or a debt to another federal agency, or certain debts under state law, the IRS may keep (offset) some or all your tax refund to pay your debt.
Your tax return may show you’re due a refund from the IRS. However, if you owe a federal tax debt from a prior tax year, or a debt to another federal agency, or certain debts under state law, the IRS may keep (offset) some or all your tax refund to pay your debt.
• Past-due federal tax
• State income tax
• State unemployment compensation debts
• Child support
• Federal nontax debt, like student loans
The IRS makes offsets for past due federal taxes. All other offsets are handled by the Treasury Department’s Bureau of the Fiscal Service (BFS), previously known as the Financial Management Service (FMS). For offsets to past-due federal tax, you’ll get an IRS notice. For all other offsets, the notice will come from BFS.
You have a balance on your tax account or the IRS records show you owe other debts that must be paid before you are eligible for a refund, so the IRS has sent you a notice to tell you they applied all or part of your refund to pay them.
The first thing to do is to check the return address to be sure it’s from the Internal Revenue Service and not another agency.
If it’s from the IRS and if the offset paid a federal tax debt
If it’s not from the IRS and the offset paid something other than a federal tax debt
If you didn’t get a notice about an offset but your tax refund is smaller than you expected, call the IRS toll-free at 1-800-829-1040 (or TTY/TDD 1-800-829-4059).
If you filed a joint tax return, you may be entitled to part or all the refund offset if you are not responsible for the debt because the debt belongs solely to your spouse. To request your part of the tax refund, file IRS Form 8379, Injured Spouse Allocation.
If your tax refund was offset to pay a joint federal tax debt and you believe only your spouse or former spouse should be held responsible for all or part of the balance due, you should request relief from the liability.
If you can’t pay the remaining amount due, you need to figure out what payment options might work for your situation, and contact the IRS to set up a payment plan or discuss other way to address your balance.
Being proactive in addressing the tax debt may prevent additional penalty and interest charges and eliminate the need for the IRS to take any further action to collect the balance. For specifics, see I got a notice from the IRS on TAS Get Help and Revocation or Denial of Passport in Case of Certain Unpaid Taxes for further information.
You can go to www.irs.gov, call the IRS tax law phone line, (800-829-1040), or use the IRS forms and publications.
Understanding your notice or letter
For more specifics on your notice, visit Understanding your IRS Notice or Letter on IRS.gov
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The Taxpayer Advocate Service is an independent organization within the IRS. TAS helps taxpayers resolve problems with the IRS, makes administrative and legislative recommendations to prevent or correct the problems, and protects taxpayer rights. TAS helps all taxpayers (and their representatives), including individuals, businesses, and exempt organizations. You may be eligible for free TAS help if your IRS problem is causing financial difficulty, if you’ve tried and been unable to resolve your issue with the IRS, or if you believe an IRS system, process, or procedure just isn’t working as it should.
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Low Income Taxpayer Clinics (LITCs) assist individuals whose income is below a certain level who need to resolve tax problems with the IRS. They also provide education, outreach, and information on taxpayer rights to individuals who speak English as a second language. LITCs represent taxpayers in disputes before the IRS and courts and help taxpayers respond to IRS notices and correct account problems. Services are offered for free or a small fee. LITCs are independent from the IRS and TAS. For more information or to find an LITC near you, see the LITC Page or Publication 4134, Low Income Taxpayer Clinic List. You can also request Pub. 4134 by calling 800-TAX-FORM (800-829-3676).
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