From the Desk of Lauran L. Stevenson
Tax Refund Offset Pay Unpaid Debts
If you cannot pay your taxes in full, the IRS will work with you to resolve your tax debt. Past due debts, like taxes owed, however, can reduce your federal tax refund. The Treasury Offset Program (“TOP”) can use all or part of your federal refund to settle certain unpaid federal or state debts. Through this program, your refund may be reduced and offset to pay past-due child support and Federal agency non-tax debts (like student loans).
The Department of Treasury’s Bureau of the Fiscal Service “BFS” runs TOP. The BFS will mail the taxpayer a notice if it offsets any part of your refund to pay another debt. The notice will list the original refund and the offset amount. It will also include the agency that received the offset payment. If you wish to dispute the offset, you must call the agency listed, not the IRS. If your spouse is solely responsible for the debt, you may be entitled to part of your refund by filing an Injured Spouse Allocation form.