How to Tell if Federal Tax Refund Will Be Offset (taken)?

It’s a brand-new year and a brand-new tax season. There are some factors affecting tax returns this year, including a delay in processing refunds of those claiming the earned income tax credit (EITC) and additional child tax credit (ACTC). These refunds are being held until February 15, regardless of the filing date, as a safeguard against identity theft and tax fraud. This delay will certainly affect those with lower incomes and children, but there are also other factors that can affect your tax refund. The term “offset” is one that is unfamiliar to many people. However, it is one of the biggest factors affecting tax returns.

What Are Offsets?

Everyone knows the IRS collects taxes, but it’s the Department of the Treasury that issues your tax refund through the Bureau of Fiscal Service. They also administer the Treasury Offset Program, which collects debts owed to federal agencies – such as student loans or in unpaid tax balance – or states and state agencies – such as child support, state taxes, or state unemployment insurance clawbacks. The debtor is informed in 60 days in advance that this will happen, but you may have moved since your last filing, and find this to be a complete surprise. You do have rights in addition to that notice, such as the debt not being in bankruptcy, forbearance, or under appeal.

How Do I Find Out for Sure?

To find out if your federal tax refund will be offset, you will need to call the Bureau of Fiscal Service directly. Their number is 800-304-3107. You may not have anyone else call for you, nor may you call on anyone else’s behalf, this is a criminal offense – don’t do it. You will need to enter your Social Security number when prompted by the recording; this will search the database and let you know if there is an impending offset. You’ll need to write down information, including the agency that will receive the offset. You do have an option to pay some of these debts online at the agency website, and they even accept PayPal. For federal student loans, you will need to go to the Department of Education’s debt resolution website.

For back taxes owed to the IRS, you can:

• pay at their website
• make an online payment agreement
• make an offer in compromise
• or even delay collection until your financial situation is more stable

Need Help?

If you think your tax refund may be delayed, if you find out if your tax return will be offset, or that your portion of the refund is being offset for spouse’s debt, and that it will cause financial hardships, I advise you to come in for a free initial consultation in our West Palm Beach or Fort Lauderdale offices. We are open seven days a week and can help you to the right your financial ship and keep you afloat. There are some different tactics consider from debt consolidation to bankruptcy that may help you. Give us a call and let’s get started on putting things right.