The Federal Tax Refund Offset Program was instituted in 1981 and initially applied only to child support debt that was owed to families on public assistance. In 1984, Congress expanded the program to include all child support enforcement cases. If your case qualifies for the program, the seizure of your refund is mandatory. Since the program was enacted through 2010, it has collected over $29 billion in past-due payments from more than 33 million federal tax refunds.
Federal Tax Refund Offset Program Overview
Cases Requiring Seizure
Not all cases qualify for the offset program. Your state child support enforcement office must be involved in collecting your child support payments from you. This makes it a Title IV-D case, one of the qualifying requirements for the federal offset program. You must be delinquent in your child support debt. If you are current your refund cannot be seized. If you are delinquent in both child and spousal support, both can be collected through your tax refund. If the custodial parent is on TANF support, you must owe at least $150, or $500 if it is a non-TANF situation. Effective 2007, debts can be collected through this program even if your child is no longer a minor; in other words, it can be collected until the back child support is paid off.
State child support collection agencies submit the names, Social Security numbers and delinquent amounts owed to the Department of Treasury. If your case is deemed eligible, you are sent a Pre-Offset notice with the amount you owe at the time of the notice. The notice includes information about other enforcement actions that can be taken, as well as information on how to dispute the offset. Your entire refund, or just a portion of it, may be seized to collect the debt, and you will receive a notice that this has happened. The refund is funneled to the state child support enforcement agency who then submits it to the family. If you have remarried and file jointly, your spouse's portion of the refund may be recoverable depending on your state's community property laws. You have the right to an administrative review if you dispute the amount owed or believe it is a case of mistaken identity. The Pre-Offset notice explains the procedure.
Other Child Support Enforcement Actions
In addition to the Federal Refund Offset Program, you may be subject to passport denial if you owe more than $2,500 in back child support. The Office of Child Support Enforcement has the authority to seize your state and federal income tax refunds; place liens on, or sell your property; report your debt to credit collection agencies; suspend professional, drivers, occupational or recreational licenses; freeze and seize bank accounts; and, in some states, under certain circumstances, order you to be imprisoned.