If you can't pay your taxes in full, the IRS will work with you. But you should know that back taxes or certain past due debts can reduce your federal tax refund. The Treasury Offset Program can use all or part of your federal refund to settle certain unpaid federal or state debts. Here are five facts to know about tax refund offsets.
- Bureau of the Fiscal Service. The Department of Treasury's Bureau of the Fiscal Service, or BFS, runs the Treasury Offset Program.
- Offsets to Pay Certain Debts. Past due federal tax debt may reduce your tax refund. The BFS may also use part or all of your tax refund to pay certain other debts such as:
- Past-due child and parent support.
- Federal agency non-tax debts, such as a delinquent student loan.
- State income tax obligations.
- Certain unemployment compensation debts owed to a state.
Health Care Law: Refund Offsets and the Individual Shared Responsibility Payment
The law prohibits the IRS from using liens or levies to collect any individual shared responsibility payment. However, if you owe a shared responsibility payment, the IRS may offset that liability against any tax refund that may be due to you.
Additional IRS Resources:
- Tax Topic 203 - Refund Offsets