A tax refund offset is when a creditor garnishes your tax refund to satisfy a debt that is owed. Tax refund offsets are common with creditors, as well as federal and state government agencies. If your tax refund is offset, there are methods in place for you to recover your money. The exact method to recover an offset varies, depending upon your marital and financial status.
Individual Tax Returns
Write a statement to the Internal Revenue Service indicating that you are challenging the offset of your tax refund.
Include in the statement your reasons for challenging the tax offset. To have the offset reversed, you need a really good reason, such as the bill has already been paid off or the debt is not yours.
Submit the written statement to the IRS.
Wait for the IRS to conduct an appeal hearing. During the hearing, the IRS will determine whether your challenge is legitimate. If deemed legitimate, the offset will be reversed.
Married Filing Jointly
Complete IRS Form 8379, "Injured Spouse Allocation," if your tax refund is offset due to your spouse's debt.
Complete IRS Form 8857, "Innocent Spouse Relief," if your tax refund is offset by the federal government due to your spouse making false or misleading information on a tax return.
Submit Form 8379 or 8857, whichever is applicable, to the IRS address that is located on the form.
Wait for the IRS to approve your request. There is no specific time-frame for the IRS to approve your request.
Request IRS Form 433-A, "Collection Information Statement for Wage Earners and Self-Employed Individuals." This form is also known as a "Hardship Request." Only complete a hardship request if the tax refund offset is preventing you from purchasing basic life necessities.
Complete the form by entering the details of your hardship. Disclose whether you have filed for bankruptcy.
Document on the form all of your assets, resources and expenses, including groceries, transportation, rent, child care and utilities.
Submit the hardship request for to the IRS. Wait for the IRS to approve your request. There is no specific time-frame for the IRS to approve your request.
Things You'll Need
IRS form 8857
IRS form 8379
IRS form 433-A