IRS Tax Refunds and Offsets: Has your Tax Refund been Seized?

1 September 2015
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Certain financial debts from your past may affect your current federal tax refund. The law allows the use of part or all of your federal tax refund to pay other federal or state debts that you owe.

Here are six facts you should know about tax refund ‘offsets.’

1. A tax refund offset generally means the U.S. Treasury has reduced your federal tax refund to pay for certain unpaid debts.

2. The Bureau of Fiscal Service (BFS), a new Bureau of the Treasury Department formed from the consolidation of the Financial Management Service and the Bureau of the Public Debt. This is the agency that issues tax refunds and conducts the Treasury Offset Program.

3. If you have unpaid debts, such as overdue child support, state income tax or student loans, BFS may apply part or all of your tax refund to pay that debt.

4. You will receive a notice from BFS if an offset occurs. The notice will include the original tax refund amount and your offset amount. It will also include the agency receiving the offset payment and that agency’s contact information.

5. If you believe you do not owe the debt or you want to dispute the amount taken from your refund, you should contact the agency that received the offset amount, not the IRS or BFS.

6. If you filed a joint tax return, you may be entitled to part or all of the refund offset. This rule applies if your spouse is solely responsible for the debt.

If you would like to know more about IRS Tax Refunds and Offsets, contact a tax attorney with the Perliski Law Group for a free initial consultation at (214) 446-3934.