Tax Refund Withholdings and Offsets

If you owe money because of certain delinquent debts, the IRS or the Department of Treasury's Financial Management Service (FMS), which issues IRS tax refunds, can offset or reduce your federal tax refund or withhold the entire amount to satisfy the debt.

FMS
Outstanding debts include past–due child support, federal agency nontax debts such as student loans, or state income tax obligations.

The Treasury, via the FMS, will automatically pull out the applicable amounts if the agency to which you owe money has submitted the debt as part of the federal offset program. FMS will take as much of your refund as is needed to pay off the debt (or debts) and send it to the agency (or agencies) you owe.

If there's anything left after offset, it will be issued to you as a check or directly deposited if that's what you requested on your return.

The taxpayer will receive a notice if an offset occurs that will reflect the original refund amount, the offset amount, the agency receiving the payment and the address and telephone number of the agency. If a notice is not received, contact the Financial Management Service at 800–304–3107, Monday through Friday from 7:30AM to 5 PM (Central Time).

If the taxpayer believes the offset took place in error, he or she should contact the agency shown on the notice.

Injured Spouse
If you filed a joint return and you're 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. Attach Form 8379 to your original Form 1040, Form 1040A, or Form 1040EZ or file it by itself after you are notified of an offset.

If you file a Form 8379 with your return, write "INJURED SPOUSE" at the top left corner of the Form 1040, 1040A, or 1040EZ. IRS will process your allocation request before an offset occurs.

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. Do not attach the previously filed Form 1040 to the Form 8379.

The IRS will compute the injured spouse's share of the joint return for you. 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.

Typically an injured spouse request takes 11 weeks to process.