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Tag Archive for tax refund offset

Why Is Your Tax Refund Being Offset?

Venar Ayar - Tax Refund Offset
What Does It Mean To Have Your Tax Refund Offset?

Instead of receiving the nice tax refund check you’ve been expecting, you get a notice in the mail. It says your tax refund has been offset. What does this mean?

A refund offset means the government has determined that you owe a debt and has applied your tax refund towards this debt. Tax refunds can offset for many types of debts—not just federal tax debts—through the Treasury Offset Program (TOP).

Refund Offsets For Federal Tax Debt

If you owe the IRS money, they will seize your tax refund check. There’s no way around this other than to resolve your tax problems.

Even while you are making payments as part of an installment agreement, the IRS may continue to seize your tax refunds and apply them towards your outstanding balance. You could adjust your withholding amounts on your W-4 or reduce your estimated tax payments, which would reduce the amount of your refund.

However, if you reduce these amounts too much, you could face underpayment penalties.

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Unpaid Debt Can Take Your Tax Refund

TaxConnections Member Barry Fowler

As the 2015 tax season approaches, you may be getting excited about your potential tax refund.

However, that excitement may be premature if you have outstanding federal or state debts. The Treasury Department’s Bureau of the Fiscal Service (BFS) issues federal tax refunds, and Congress authorizes BFS to reduce your refund through its Treasury Offset Program (TOP) to pay:

• Past-due child and parent support;

• Federal agency non-tax debts;  Read more

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