What is a Tax Refund Offset?

Will you be hit with a tax refund offset?

Will you be hit with a tax refund offset?Did you know the IRS launched tax season on January 29? Millions of Americans are gearing up to file their taxes, and if everything goes smoothly, receive tax refunds. In 2017, the IRS issued 108,761,000 refunds. However, your tax refund could be offset by the Department of the Treasury or the IRS if you owe government debt. Tax refund offsets can be issued for:

  • Defaulted federal student loans: Your tax refund could be offset if you have defaulted on federal student loans. In this case, the Department of Education would refer your defaulted loans to the Department of the Treasury to initiate a tax refund offset. You are generally considered in default after 270 days of nonpayment.
  • Unpaid child support: You could be subjected to a tax refund offset for unpaid child support. The Office of Child Support Enforcement could refer your unpaid support to the Department of the Treasury.
  • Back taxes: Your tax refund could be offset if you owe state or federal taxes. Fees could also be attached to any amount you owe. Therefore, you may not receive any of your refund if you owe state or federal taxes. It would depend on the situation.

These are three common reasons why people have their tax refunds offset. You will a receive notice from the IRS or the Treasury Department’s Bureau of Fiscal Service before your refund is garnished. Fortunately, you are allowed to appeal an offset. There are cases where you could successfully appeal the decision. You may also receive your refund if your spouse is fully responsible for the debt that led to an offset.

Questions About Debt Relief? Call Our New Jersey Bankruptcy Lawyers for Help

Tax refund offsets typically occur if you are already experiencing financial difficulties. If you are struggling financially, then you should consider speaking to a bankruptcy attorney. The New Jersey bankruptcy attorneys at Garland & Mason L.L.C could discuss your available options for debt relief.



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