5 Important Facts about Tax Refund Offsets You Shouldn?t Ignore

Posted by Lucas Bell on January 17th, 2018

Whether you are going under the pressure of some financial documents or you are afraid of getting audited, most the IRS won’t spare you for the tax debt. The IRS can help you as well. In case you can’t pay your taxes in full within deadline, you can seek help form the IRS.

Past due debts such as taxes owed, though, can decrease your federal tax refund. It is the Treasury Offset Program you can approach for the solution. This program can use all or part of your federal refund to settle certain state tax debt or unpaid federal.

Read this article to know the five facts about tax refund offsets.               

Bureau of the Fiscal Service

According to the information available at the official website of the Internal Revenue Service, the Department of Treasury’s Bureau of the Fiscal Service is solely responsible for running the Treasury Offset Program.

Offsets to Pay Certain Debts

The BFS has also the right to use some parts or your entire tax refund and to pay certain other debts, including Federal tax debts, Federal agency debts Past-due child and spousal support debts owed to a state.

Mail Notification

It’s important to know that the BFS sends you a notice via a mail if it offsets any part of your refund for paying your debt. This notice contains the original refund and the balance amount. Moreover, it also includes the agency that received the balance payment. You will also find the contact information of the agency in the mail letter.

Tips to Dispute Offset

Like others, if you want to dispute the offset, the BFS allows you to contact the agency that received the offset payment. You should only contact the IRS in case your offset payment was applied to a federal tax debt.

Injured Spouse Allocation

If you have files a joint tax return with your spouse, you may be allowed to get the part or the entire offset. But, you are only entitled to enjoy this rule if your spouse is responsible for the debt. To get the part of the refund, you will need to file form 8379, Injured Spouse Allocation. If you need to prepare a Form 8379, you can be allowed to do that and e-file your tax returns for free using IRS Free File.

Conclusion

As a tax payer, you have the right to know when you should deal with the IRS. This is your fundamental right.

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Lucas Bell

About the Author

Lucas Bell
Joined: December 13th, 2017
Articles Posted: 43

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