A Failure to Pay Child Support, Federal Non–Tax and State Income Tax Obligations could go to The Department of Treasury’s Financial Management Service (FMS), which issues IRS tax refunds first. They have been authorized by Congress to conduct the Treasury Offset Program. Through this program, your refund or overpayment could be reduced by FMS to pay any past–due child support, Federal agency non–tax debts, or state income tax obligations.
You can contact the agency with which you have a debt, to determine if your debt was submitted for a tax refund offset. The IRS won’t be able to tell you this until after FMS has taken your refund. If your debt was submitted for “offset”, FMS will take as much of your refund as is needed to pay off the debt and send it to the agency owed. Any portion of your refund remaining after offset will be issued in a check.
You will get a letter if an offset occurs. This notice will reveal the original refund amount, your offset amount, who they are paying, and their address and telephone number. FMS will notify the IRS of the amount taken from your refund. Contact the agency shown on the notice if you believe you do not owe the debt or you are disputing the amount taken from your refund. Contact the IRS only if your original refund amount shown on the FMS offset notice differs from the refund amount shown on your tax return.
If you filed a joint return and you’re not responsible for the debt, but you are entitled to a portion of the refund you may request your portion of the refund by filing Form 8379, Injured Spouse Allocation. Attach Form 8379 to your original Form 1040, Form 1040A, or Form 1040EZ or file it by itself after you are notified of an offset. If you file a Form 8379 with your return, write “INJURED SPOUSE” at the top left corner of the Form 1040, 1040A, or 1040EZ. The IRS will process your allocation request before an offset occurs. If you file Form 8379 with your original return, it possibly will take 11 to 14 weeks from the date of filing to process your return.
Follow the instructions on Form 8379 carefully and be sure to attach the required forms to avoid delays. Do not attach the previously filed Form 1040 to the Form 8379. Send Form 8379 to the Service Center where you filed your original tax return. Allow at least 10 weeks for IRS to process your allocation request. They will compute the injured spouse’s share of the joint return for you. If you lived in a community property state during the tax year, they will divide the joint refund based upon state law.
For additional information, FMS can be reached at 1-800-304-3107.
© 2008, Bruce Mc. All rights reserved.
