Why Is Your Tax Refund Being Offset?

Instead of receiving that nice tax refund check (or direct deposit) you’ve been expecting, you get a notice in the mail.  It tells you that your tax refund has been offset.  What exactly does this mean?

Well, a refund offset means the government has determined that you owe a debt and has applied your tax refund towards that debt.  Now, tax refunds can be offset for many types of debts through the Treasury Offset Program (TOP).  This post will address some of the questions that one commonly has after an offset occurs.

When is a debt sent to the Treasury Offset Program?

In most cases, your name can be sent to TOP if your debt is more than 90 days delinquent. The government agency must then determine that your debt is valid and legally enforceable. The agency will then send you notices about your debt and provide you with opportunities to resolve or dispute your debt. They must also respond to questions and inquiries regarding your debt. If you have not received a notice about your debt, the first step you should take would be to call the agency to which you owe the debt and talk to them.

How do I determine if I have an offset or who I may owe?

To determine if your Federal tax refund has been, or will be offset, it is best to contact the TOP. They can be reached at 800-304-3107.

What types of debt does an offset cover?

Even if you don’t owe the IRS money, your federal tax refund can still be offset through the TOP. Your refund may be seized to pay the following types of debts:

  • State income tax debt
  • Federal non-tax debt (such as delinquent federal student loans)
  • Past-due child support
  • Certain unemployment compensation debts.  You should receive a notice that tells you which agency is getting the money from your tax refund c