Every year the Taxpayer Advocate Service (TAS) helps thousands of people with tax problems. This story is only one of many examples of how TAS helps resolve taxpayer issues. All personal details are removed to protect the privacy of the taxpayer.

TAS was contacted by a taxpayer who was experiencing a significant financial hardship. The taxpayer and her children were in danger of being evicted. Although the taxpayer filed a tax return claiming a refund, she owed federal taxes from a previous year. The IRS normally applies overpayments to satisfy federal tax debts before issuing any refunds, but the taxpayer needed part of her overpayment to retain housing for her family. In certain situations, the IRS can allow for refunds to be issued rather than applied to a federal tax debt via a manual process referred to as an offset bypass refund (OBR). (The IRS must remit overpayments to satisfy certain other debts, with no bypass discretion, so if a taxpayer has certain debts in addition to federal tax debt, that portion of the overpayment cannot be bypassed.)   

The IRS cannot issue an OBR after the tax has been assessed and the overpayment has been applied to a tax debt, so TAS had very little time in which to provide relief. The TAS manager stepped in, having part of the taxpayer’s overpayment retained as a credit until it could be refunded. The manager met with some opposition and quickly enlisted the help of a technical reviewer. Based on TAS’s actions and effective advocacy, the IRS refunded a portion of the overpayment to prevent the taxpayer and her family from being evicted. But TAS didn’t stop there. Based on the technical advisor’s findings of the taxpayer’s documented economic hardship, TAS was able to negotiate with the IRS to refund enough of the overpayment to also prevent the taxpayer’s utilities from being disconnected and her vehicle from being repossessed. The taxpayer was very thankful and appreciative of the case advocate and manager’s expeditious actions on her behalf, saying she had not been able to sleep at night and that the employee placed her at ease.  

When working with the Taxpayer Advocate Service, each individual or business taxpayer is assigned to an advocate who listens to the problem and helps the taxpayer understand what needs to be done to resolve their tax issue. TAS advocates will do everything they can to help taxpayers and work with them every step of the way. Occasionally we feature stories of taxpayers and advocates who work together to resolve complex tax issues. Read more TAS success stories.

Learn more about whether TAS can help you: Can TAS help me with my tax issue?