This is a question that many taxpayers find themselves asking every year. After having taxes withdrawn from their weekly paychecks or having made quarterly estimated payments they are shocked to find out that their refund is being seized.
Under the Treasury Offset Program the IRS can use all or part of your federal refund to settle certain unpaid federal or state debts. Besides retaining your tax refund to pay past due federal tax debt, your tax refund may be used to pay certain other debts such as:
- Past-due child and parent support.
- Federal agency non-tax debts, such as a delinquent student loan.
- State income tax obligations.Certain unemployment compensation debts owed to a state.
However, you may have certain defenses to the seizure of your tax refund, such as an “injured spouse,” that may protect your tax refund.
If your tax refund is being seized by the IRS under the Treasury Offset Program or you having any questions regarding Federal or State tax issues please contact a tax professional.