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
You are considered insolvent if you owe more than the value of your assets. This can be important if you received IRS Form 1099-C, Cancellation of Debt.
The discrepancy between your name and your Taxpayer Identification Number has been corrected. Learn more from the tax experts at H&R Block.
Learn more about the latest updates for 2018 tax withholding with H&R Block. Find out how your paycheck may be impacted by the new 2018 withholding tables.
Most Forms 1099-G are received for unemployment compensation or from state or local income tax refunds. Learn more from the tax experts at H&R Block.