This comes as a great surprise to many expecting their IRS tax refund. The IRS sends a notice telling you they have used their right to offset to pay old debts such as State Tax Debts, Child Support or even Student loans.
If this happens to you I would suggest calling us at Fresh Start Tax, 1-866-700-1040 to permanently resolve your IRS tax matter and get tax relief.
Most taxpayers in this situation may qualify for an offer in compromise or a tax debt settlement. By calling our office we can find out if you qualify.
Here are the rules and regs regarding tax refunds that may be applied to offset certain debts
The Department of Treasury’s Financial Management Service, which issues IRS tax refunds, can use part or all of your federal tax refund to satisfy certain unpaid debts.
Facts you what to know about tax refund offsets:
1. If you owe federal or state income taxes, your refund will be offset to pay those taxes first. 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 refund as is needed to pay off the debt and then issue any remaining refund to you if a tax refund is applicable.
2. You will receive a notice from the IRS if an offset occur. The offset will occur each and every year to the problem is resolved.
The tax notice will include the original refund amount, your offset amount, the agency receiving the payment and its contact information. If the information about the exist debt is incorrect, we suggest you contact them directly to resolve the problem.
3. If you believe you do not owe the debt or you are disputing the amount taken from your refund, you should contact the agency shown on the notice, not the IRS.
4. If you filed a joint return and you are not responsible for the debt, but you are entitled to a portion of the refund, you may request your portion of the refund by filing IRS Form 8379, Injured Spouse Allocation.
You should attach IRS tax form 8379 to your original Form 1040, Form 1040A, or Form 1040EZ or file it by itself after you are notified of an offset. Form 8379 can be downloaded from the IRS website at www.irs.gov.
5. You can file Form 8379 electronically. If you file a paper tax return you can include Form 8379 with your 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.
6. If you are filing Form 8379 by itself, it must show both spouses’ Social Security numbers in the same order as they appeared on your income tax return. You, the “injured” spouse, must sign the form.
You should not attach the previously filed Form 1040 to the Form 8379.
Send the Form 8379 to the IRS Service Center where you filed your original return only so the documentation may be matched.
7. The IRS will compute the injured spouse’s share of the joint return. Contact the IRS only if your original refund amount shown on the FMS offset notice differs from the refund amount shown on your tax return.
8. Follow the instructions on Form 8379 carefully and be sure to attach the required forms to avoid delays.
If you are looking for quality tax relief from a professional tax firm, call Fresh Start Tax LLC today.
