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Tax Offset

Are you expecting a tax refund but have some outstanding debts? Don’t risk losing your money! Tax Defense Network may be able to help you avoid a tax offset.

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What is a Tax Offset?

If you owe money to the federal government due to a delinquent debt, your tax refund can be withheld to satisfy the debt. This is known as tax offset. The Bureau of Fiscal Service (BFS), which issues tax refund checks, manages the Treasury Offset Program (TOP). Although the IRS has the power to keep your tax refund to pay back taxes, the BFS may also retain your refund to pay:

  • Delinquent child support
  • Overdue spousal support
  • State income tax debts
  • Delinquent student loan payments
  • Unemployment compensation debts
  • Other federal agency non-tax debts

Before the BFS takes your refund, you should receive a Notice of Intent to Offset. It will list the agency that requested the offset, as well as the amount of your refund before and after the money is sent to satisfy your debt. If you don’t receive this letter, you can call 800-304-3107 to request a copy.


How to Avoid a Tax Offset

Once you receive a Notice of Intent to Offset, you must act quickly. You typically have 60 days before your refund is taken. For federal tax debts, you may be able to avoid an offset if you pay your taxes in full or file for bankruptcy. During your bankruptcy proceedings, the court may issue an automatic stay which could prevent the IRS from taking your refund while your case is still active.

If your tax refund was already offset, however, you may still be able to recover some or all of it. Depending on your filing status and financial situation, you could be eligible to file an injured spouse claim or a hardship refund request.


IRS Hardship Refund Request

Although the IRS is not legally obligated to return any tax refund taken, it may do so if the offset will cause economic hardship. Unfortunately, there are no forms to complete to request an IRS hardship refund. You’ll need to contact the IRS and provide enough evidence to compel them to reverse their decision. This is where the services of a tax professional can come in handy. Our tax experts know what information is required and can negotiate with the IRS on your behalf. To see if you’re a good candidate for an IRS hardship refund, schedule a free consultation by calling 855-476-6920 today!

Tax Defense Network
“They gave me options and expert advice. Wisconsin Department of Revenue fought me to the bitter end, but I had a team that fought just as hard. At the end I got my bank account back with 90% of my money back.”
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Common Questions About Tax Offset