Question

Can an IRS tax lien be deducted from my refund and then send me any remaining refund?

Answer

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

Related Topics

Related Resources

Planning to Deduct Charitable Contributions? Tax Reform May Change That

When it comes to philanthropic giving and larger charitable contributions, tax reform may change how you deduct gifts. Learn more from H&R Block's experts.

Never Received My State Tax Refund

If you filed taxes last year but never received your state tax refund, what should you do? Get the answer from the tax experts at H&R Block.

What You Need to Know About the Form 8863 Update

Some taxpayers are receiving letters from the IRS related to Form 8863 (Education Credits). Find out the latest information about Form 8863 at H&R Block.

Small Business & Freelance Quarterly Taxes – Due Dates | H&R Block

For freelancers and small business owners, quarterly estimated taxes are a likely requirement. Make sure you don't miss a payment with H&R Block.