Past due financial obligations can affect your current federal tax return refund. The Department of Treasury’s Financial Management Service, which issues IRS tax refunds, can use part or all of your federal income tax refund to satisfy certain unpaid debts.
Here are some important facts you should know about tax refund offsets:
- If you owe federal or state income taxes, your tax refund will be offset to pay those back taxes. If you had other debt such as child support or student loan debt that was submitted for offset, FMS will apply as much of your tax refund as is needed to pay off the debt and then issue any remaining refund to you.
- You will receive a notice if an offset occurs. The notice will include the original tax refund amount, your offset amount, the agency receiving the payment and its contact information.
- If you believe you do not owe the tax debt or you are disputing the amount taken from your refund, you should contact the agency shown on the notice, not the IRS.
- If you filed a joint tax return and you’re not responsible for the debt, but you are entitled to a portion of the refund, you may request your portion of the tax refund by filing IRS Form 8379, Injured Spouse Allocation.
- You can file Form 8379 electronically. If you file a tax return on paper you can include Form 8379 with your income tax return, write “INJURED SPOUSE” at the top left of the Form 1040, 1040A or 1040EZ. IRS will process your allocation request before an offset occurs.
- If you are filing taxes with Form 8379 by itself, it must show both spouses’ Social Security numbers in the same order as they appeared on the income tax returns.
- The IRS will compute the injured spouse’s share of the joint federal tax return.
If you are concerned that you may have some tax debt issues that can affect your tax refund, please contact us at 407-344-1012. Our professional tax services team will help you in a knowledgeable and friendly manner. Freedom tax IRS Enrolled Agents are authorized by the federal government to represent individuals with the IRS. The Freedomtax staff has be offering honest tax debt services for 15 years. Contact us for your FREE Consultation. God Bless.