Tax Dictionary – Refund Offset

IRS Definition

The Treasury Offset Program will use all or part of a federal tax refund to settle certain unpaid federal or state debts.

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If you owe federal tax debt for another tax year, past-due child support, state income tax and/or federal non-tax debt (such as student loans), your refund can be taken (offset) to pay those debts. You will be sent a notice informing you that your refund has been taken to pay another debt. If you are not liable for the debt that is being paid (it is your spouse’s debt but not yours), you can file Form 8379, Injured Spouse Allocation to get back your portion of the refund that was taken.

Learn how to address an unpaid tax bill.

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