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Published:   |   Last Updated: October 17, 2023

Notice CP39 – Overpayment, Refund Applied to Other Tax Debt (Offset)

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Notice Overview

Your tax return may show you’re due a refund from the IRS. However, if you owe a federal tax debt from a prior tax year, the IRS may keep (offset) some or all your tax refund to pay your debt. The CP39 notice is mailed to taxpayers to notify them that the IRS used all or part of their refund to pay a past due tax debt. You may still owe money for that prior tax year.

This notice or letter may include additional topics that have not yet been covered here. Please check back frequently for updates.

What does this mean to me?

The refund amount that you were expecting has changed. All or part of that refund was applied to an unpaid federal tax debt from a prior tax year, reducing or eliminating the balance due for that prior tax year. 

How did I get here?

The IRS received an income tax return using your name, Social Security number (SSN) or individual taxpayer identification number (ITIN). That return indicated an overpayment to be refunded to you; however, an unpaid balance remained from a prior tax year. A balance may still remain for that prior tax year after your refund has been applied. 

 

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What are my next steps?

The first thing to do is to check the return address to be sure it’s from the IRS and not another agency.

Read your notice carefully. It will explain how we applied the refund, how much tax (if any) you still owe, and how to pay any remaining balance due.

If you didn’t file the return claiming the refund that was applied to your unpaid federal tax debt: Call the IRS immediately, as you may be a victim of tax-related identity theft. See Taxpayer Guide to Identity Theft | irs.gov.

You can authorize someone (such as a certified public accountant, attorney, or enrolled agent) to represent you before the IRS.  Alternatively, you can authorize anyone (including a family member) to receive your confidential tax information.

What if I disagree

If you disagree, call the IRS at the toll-free number on the top right corner of your notice. Please have your paperwork (such as cancelled checks, amended return, etc.) ready when you call.

If a portion of your joint refund was applied (often referred to as offset) to federal taxes owed by your spouse and you don’t legally owe any portion of the debt, you can file a Form 8379, Injured Spouse Allocation (PDF), to claim your share of the joint refund.

If your tax refund was offset to pay a joint federal tax debt and you believe your spouse or former spouse should be held responsible for all or part of the balance due, you should request relief from the liability. To request relief, file Form 8857, Request for Innocent Spouse Relief.

What happens if the refund used didn’t pay the full amount I owed, and I can’t pay the rest?

Pay online, by phone, or with a mobile device. Visit IRS.gov/payments or the IRS2Go mobile app for all IRS payment options.

If you plan to mail a payment, consider the electronic options at IRS.gov/payments first. It’s free to pay from a bank account (Direct Pay) or the Electronic Federal Tax Payment System (EFTPS). You can also schedule payments and receive email notifications.

If you pay by check, money order, or cashier’s check, make sure it’s payable to the U.S. Treasury.

Can’t pay it all now?

If you can’t pay the full amount by that date, you need to figure out what payment options might work for your situation and contact the IRS to set up a payment plan or discuss other ways to address your balance. 

Being proactive in addressing the tax debt may prevent additional penalty and interest charges and eliminate the need for the IRS to take action to collect the balance. 

Where can I get additional help?

Understanding your Notice or Letter

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If you still need help

The Taxpayer Advocate Service (TAS) is an independent organization within the IRS that helps taxpayers and protects taxpayers’ rights. We can offer you help if your tax problem is causing a financial difficulty, you’ve tried and been unable to resolve your issue with the IRS, or you believe an IRS system, process, or procedure just isn’t working as it should. If you qualify for our assistance, which is always free, we will do everything possible to help you.

Visit www.taxpayeradvocate.irs.gov or call 1-877-777-4778.

Low Income Taxpayer Clinics (LITCs) are independent from the IRS and TAS. LITCs represent individuals whose income is below a certain level and who need to resolve tax problems with the IRS. LITCs can represent taxpayers in audits, appeals, and tax collection disputes before the IRS and in court. In addition, LITCs can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. Services are offered for free or a small fee. For more information or to find an LITC near you, see the LITC page on the TAS website or Publication 4134, Low Income Taxpayer Clinic List. This Publication is also available online at www.irs.gov or by calling the IRS at 1-800-829-3676.

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Where am I in the tax system?

Notice CP39, Overpayment, Refund Applied to Other Tax Debt (Offset)