Understanding Tax Refund Offsets
The Bureau of the Fiscal Service (BFS) has the authority to reduce or withhold tax refunds to settle outstanding debts owed to federal agencies. This process is known as a tax refund offset. Debts eligible for offset include:
- Past-due child support
- Federal agency nontax debts
- State income tax obligations
- Unemployment compensation debts owed to a state (typically for fraudulent claims or unpaid contributions)
Identifying Potential Offsets
To determine if your tax refund may be subject to an offset, you can:
- Contact the agency with which you have a debt to inquire about potential offset actions.
- Call the BFS’s Tax Refund Offset (TRO) call center at 800-304-3107.
Notification of Offset
If BFS determines that your refund will be offset, you will receive a notice that includes:
- Original refund amount
- Offset amount
- Agency receiving the payment
- Agency’s contact information
BFS will also notify the IRS of the offset amount after your refund date.
Injured Spouse Claim
If you filed a joint tax return and your spouse owes the debt subject to offset, you can claim your portion of the refund by filing IRS Form 8379, Injured Spouse Allocation. This form can be filed:
- With your original joint tax return
- With an amended joint tax return (Form 1040-X)
- Separately after receiving notification of the offset
Additional Information
Not all debts are subject to tax refund offsets. To determine if a specific debt is eligible for offset, contact the BFS’s TRO call center at 800-304-3107.
Summary Table: Tax Refund Offset Process
| Step | Action |
|---|---|
| 1 | Determine if you have any outstanding debts that may be subject to offset. |
| 2 | Contact the relevant agency or BFS’s TRO call center to inquire about potential offsets. |
| 3 | If an offset is likely, file an Injured Spouse Claim (Form 8379) if applicable. |
| 4 | Receive a notice from BFS if an offset occurs, detailing the offset amount and recipient agency. |
| 5 | Contact the agency receiving the offset if you believe the debt is incorrect or disputed. |
| 6 | Contact the IRS only if the original refund amount on the BFS notice differs from the amount on your tax return. |
IRS Tax Refund Update – Delays and Smaller Refunds
FAQ
How can I find out if the IRS will intercept my refund?
How to find out if your income tax refund will be garnished online?
How do I know if the IRS is holding my refund?
Will my taxes get intercepted?
How do I Check my IRS tax refund?
Use the IRS Where’s My Refund tool or the IRS2Go mobile app to check your refund online. This is the fastest and easiest way to track your refund. The systems are updated once every 24 hours. You can contact the IRS to check on the status of your refund. If you call, wait times to speak with a representative can be long.
How do I know if my tax return is processed?
If we need more information to process your return, we’ll send you a letter. See your personalized refund date as soon as the IRS processes your tax return and approves your refund. See your status starting around 24 hours after you e-file or 4 weeks after you mail a paper return.
What if I don’t get my tax refund?
If you file using tax software or a tax pro, you can start tracking your IRS refund status 24 hours after the IRS receives your return. If you haven’t received your tax refund after at least 21 days of filing online or six months of mailing your paper return, go to a local IRS office or call the agency’s main number.
Where’s my tax refund?
The IRS “Where’s My Refund?” tracker is the fastest way to check your federal tax refund status. The agency updates the tracker once per day, usually overnight. You can start checking on your tax refund status 24 hours after e-filing your return and from four weeks to six months after mailing a paper return.