Treasury Offset Program

IRS Definition

Through the Treasury Offset Program, the Bureau of Fiscal Services may reduce your refund (overpayment) and offset it to pay:

• Past-due child and spousal support;
• Federal agency non-tax debts;
• State income tax obligations; or
• Certain unemployment compensation debts owed to a state (generally, these are debts for (1) compensation paid due to fraud, or (2) contributions owing to a state fund that weren’t paid).

More from H&R Block

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.