5 Facts About Tax Refund Offsets
It’s Refund Season
It is that time of the year again. Those getting a refund are elated, but those having to pay back taxes are without a doubt disappointed. If you can’t pay your taxes in full, the IRS will work with you. However you should know that back taxes or certain past due debts can reduce your federal tax refund. The Treasury Offset Program can use all or part of your federal refund to settle certain unpaid federal or state debts that have been long overdue.
Here are five facts to know about tax refund offsets.
The Department of Treasury’s Bureau of the Fiscal Service, or BFS, runs the Treasury Offset Program. Past due federal tax debt may reduce your tax refund. The BFS may also use part or all of your tax refund to pay certain other debts such as:
- Past-due child and parent support.
- Federal agency non-tax debts, such as a delinquent student loan.
- State income tax obligations.
- Certain unemployment compensation debts owed to a state.
The BFS will mail you a notice if it offsets any part of your refund to pay your debt. The notice will list the original refund and offset amount. It will also include the agency that received the offset payment. It will also give their contact information. If you wish to dispute the offset, you should contact the agency that received the offset payment.
You may be entitled to part or all of the offset if you filed a joint tax return with your spouse. This rule applies if your spouse is solely responsible for the debt. To get your part of the refund, to Irs.gov/forms to obtain Form 8379, Injured Spouse Allocation.