If you have tax debt, there is a risk that the Internal Revenue Service (IRS) could opt to withhold all, or a portion, of your federal income tax refund. The IRS is authorized to use your refund to pay off your tax debt, depending on how much you owe. This is known as a “tax refund offset” (sometimes also referred to as an “administrative offset”).
When a Tax Refund Offset Can Occur
The IRS is authorized to offset your tax refund for the following types of tax debt:
- Federal tax debt
- State tax debt
- State unemployment compensation debts
- Spousal support and child support payments
- Unpaid federal student loans
Requesting an Offset Bypass
If you’re looking for tax debt relief, or simply want to ensure you get access to your tax refund, you may have grounds to request an “offset bypass” on federal tax debt. Generally speaking, to qualify for an offset bypass, you need to provide evidence of financial hardship. It’s also important to file all your federal and state tax returns on time. Specifically, you cannot request an offset bypass if you haven’t filed a tax return for the current year or in recent years.
In addition, you need to take proactive steps to formally request an offset refund bypass. Why? Because once the IRS takes your federal tax refund and applies it to your unpaid tax bill, you cannot get tax debt relief through an OBR.
Here’s how to keep your hard-earned money in your pocket and avoid a reduced refund if you need that money to keep your home, pay your electric bill, or fund other necessities of life.
Assessing an Offset Bypass Request
Once you formally request an offset bypass, the IRS will review the grounds for your request and may opt to issue an OBR if you are:
- Experiencing economic harm or about to suffer economic harm
- Facing immediate threat of adverse action (e.g., foreclosure or eviction)
- At risk of incurring significant costs (including professional representation or legal fees)
- At risk of suffering irreparable injury or long-term adverse impact
Basically, if you are experiencing significant economic hardship (e.g., you are likely to be evicted or have your house foreclosed on), then your offset bypass request is likely to be granted. Similarly, if the IRS’ refund offset would make it impossible for you to pay your utility bills to keep your electric, heat, and other utilities turned on in your home, then the IRS may grant your refund offset request. To properly assess your eligibility for an offset bypass, speak to an experienced tax debt relief professional.
Looking for Tax Debt Relief Through a Refund Offset Request? Contact Anderson Bradshaw Tax Consulting
If you’re concerned about the IRS possibly withholding all, or a portion, of your tax refund, now is the time to take proactive steps to protect your refund check. Contact the experienced and knowledgeable tax relief consultants at Anderson Bradshaw Tax Consulting for assistance. Our tax professionals will assess your situation and offer guidance on different tax debt relief strategies.
With more than three decades of experience in the industry, our expert tax relief professionals at Anderson Bradshaw have handled a wide variety of tax situations, including offset bypass requests. For further information or to schedule a consultation, please contact Anderson Bradshaw Tax Consulting at 877.550.3911 or visit www.AndersonBradshawTax.com to learn more.
