Can an IRS tax lien be deducted from my refund and then send me any remaining refund?
It depends on the type of tax lien. Following are some lien examples that can result in debt offset that can reduce your refund:
- Overdue federal tax debts
- Past-due child support
- Federal agency nontax debts
- State income tax debt
- Unemployment compensation debts owed to a state (for fraudulent wages paid or contributions due to a state fund)
- Direct and guaranteed student loan repayments
- Small Business Administration (SBA) loan repayments
- Department of Housing and Urban Development (HUD) loan repayments
If this applies to you, the Department of Treasury’s Bureau of Fiscal Service (BFS) will take your refund to pay the debt. The BFS will send it to the agency you owe. The IRS will then give you a check or direct deposit for any remaining refund.
If there’s an offset, the BFS will send you a notice showing:
- Original refund amount
- Your offset amount
- Agency receiving the payment
- Address and phone number of the agency
The IRS will usually audit a tax return within three years after the return was filed. Learn more about IRS audit procedures from the experts at H&R Block.
If you did not have health care coverage, you may need to calculate your shared responsibility payment when filing your return. Learn more from H&R Block.
If you’ve received unemployment compensation or a state tax refund, you’ll receive Form 1099-G. Learn more about Form 1099-G and how it affects your taxes.
Learn more about notice LT14, why you received it, and how to handle an IRS bill for unpaid tax with help from the tax experts at H&R Block.