Popular search terms:
Published: October 21, 2020   |   Last Updated: October 13, 2022

Refund from Another Year Applied to Debt

View our interactive tax map to see where you are in the tax process. It could help you navigate your way through the IRS.

Show on Roadmap
Taxpayer Roadmap with folded image in front

Station 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, or a debt to another federal agency, or certain debts under state law, the IRS may keep (offset) some or all your tax refund to pay your debt.

Note that depending on the type of debt, the IRS must offset your refund to pay the debt.

What does this mean to me?

The IRS has kept (offset) some or all your tax refund to pay a debt you owe.  The IRS can offset your refund to pay debts such as:

    • Past-due federal tax
    • State income tax
    • State unemployment compensation debts
    • Child support
    • Federal nontax debt, like student loans

The IRS makes offsets for past due federal taxes.  All other offsets are handled by the Treasury Department’s Bureau of the Fiscal Service (BFS).  For offsets against past due federal tax, you’ll be mailed an IRS notice.  For all other offsets, the notice will come from BFS. The BFS notice will reflect the amount of your refund, the amount that was offset, the agency that received the payment, and an address and phone number for that agency.

1
1.

How did I get here?

You have an outstanding balance on your tax account or you owe other debts that must be paid before you are eligible to receive a refund.  A notice was mailed to your last known address, telling you that all or part of your refund has been applied to pay the debt.

2
2.

What are my next steps?

The notice explains how your refund was applied by the IRS or BFS.  If you agree with the changes that have been made, no response is required.  Please note that the offset will occur even if you are on a payment plan or if the IRS has placed your account in Currently Not Collectible (CNC) status.

If you didn’t file the return claiming the refund that was applied to another debt: Call the IRS immediately, as you may be a victim of tax-related identity theft.  For more information, see the

  • If you can full pay your remaining tax debt, see online payment
  • If you can’t pay the balance due and have not made payment arrangements with the IRS, contact the IRS to discuss payment options for your financial situation.
  • If you want more details about your tax account, you can order a transcript of your tax account online, by phone, or by mail. If you need more information regarding the balance owed, call the IRS at the number provided in the notice.
  • If you don’t agree with the offset to a federal tax debt, call the IRS at the number provided in the notice.
  • If you receive a notice of offset from BFS and believe you don’t owe the debt or have questions about the debt, contact the agency that received your tax refund as shown on your notice.
  • If you need more information on the offset, contact BFS toll-free at 1-800-304-3107 (or TTY/TDD 1-866-297-0517) (Monday through Friday, 7:30 a.m. to 5:00 p.m. CST) to find out where your tax refund was applied.
  • If you didn’t get a notice about an offset but your tax refund is smaller than you expected, call the IRS toll-free at 1-800-829-1040 (or TTY/TDD 1-800-829-4059).
  • If part or your tax refund was offset but you did not receive the remainder of your refund, call the IRS at the number provided in the notice.
  • If you filed a joint tax return and your joint refund was applied to a debt that belongs solely to your spouse, you may be able to recover all or part of the refund offset. To request your part of the tax refund, file IRS Form 8379, Injured Spouse Allocation.
  • If your tax refund was offset to pay a joint federal tax debt and you believe you should not be held responsible for all or part of the balance due, file IRS Form 8857, Request for Innocent Spouse Relief. The instructions for Form 8857 provide helpful directions.  The IRS will use the information you provide on IRS Form 8857 and any additional documentation you submit to determine if you’re eligible for relief.

 


If it’s not from the IRS and the offset paid something other than a federal tax debt

  • If you need more information on the offset, contact the BFS toll-free at 1-800-304-3107 (or TTY/TDD 1-866-297-0517) (Monday through Friday, 7:30 a.m. to 5:00 p.m. CST) to find out where Treasury applied your tax refund.
  • If you believe you don’t owe a debt to another agency or have questions about it, contact the agency that received your tax refund as shown in your notice.
  • If part of your tax refund offset but you didn’t receive the remainder of your refund, contact the IRS to resolve the discrepancy.

If you didn’t get a notice about an offset but your tax refund is smaller than you expected, call the IRS toll-free at 1-800-829-1040 (or TTY/TDD 1-800-829-4059).

 

If you filed a joint tax return, you may be entitled to part or all the refund offset if you are not responsible for the debt because the debt belongs solely to your spouse. To request your part of the tax refund, file IRS Form 8379, Injured Spouse Allocation.

If your tax refund was offset to pay a joint federal tax debt and you believe only 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 IRS Form 8857, Request for Innocent Spouse Relief. Theinstructions for Form 8857 have helpful directions.
  • The IRS will use the information you provide on IRS Form 8857, and any additional documentation you submit, to determine if you’re eligible for relief.

If you can’t pay the remaining amount due, 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 way 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 any further action to collect the balance. For specifics, see I got a notice from the IRS on TAS Get Help  and Revocation or Denial of Passport in Case of Certain Unpaid Taxes for further information.

Where can I get additional help?

IRS.gov has resources

Get Help topics

Browse common tax issues and situations at TAS Get Help

If you still need help

The Taxpayer Advocate Service 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.

Where am I in the tax system?

Refund from Another Year Applied to Debt

en English
X