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IRS Offset Number | How to Know if You Have Tax Offsets?

2 kid with a father hugingThe Internal Revenue Service (IRS) is the ‘tax man’ of the United States Federal government.

This department is responsible for tax collection and administration of the internal revenue code, the IRS is a bureau of the Department of Treasury.

When money is owed by you because of certain unpaid debts the IRS or the Department of treasury’s Financial Management Service (FMS), which issues IRS tax refunds, have the authority to offset or reduce or even entirely hold back your federal tax refund amount to satisfy the debt.

The financial debts from your past, affects your federal tax refund and the law permits the use of a portion or all of your federal tax refund amount to service the other federal or state debts owed by you.

So, what exactly does it mean to offset federal payments?

Listed below are details that you should be aware of about tax refunds offsets, given by the IRS:

  • reduced by the U.S. Treasury in order to repay some of your unpaid loans.
  • These tax refunds are issued by the Financial Management Service (FMS) of the Treasury Department.
  • The FMS can use all or a part of your tax refund to repay any of your unpaid debts such as overdue child support, state income tax or student loans.
  • In the event that you are eligible for a tax offset, the FMS issues a notice to intimate you. This notice will include details about the original tax refund amount and your offset amount.

You will also be informed of the name of the agency that will receive this offset payment, as well as its contact information.

  • In case you believe that no money is owed by you or you wish to dispute the amount debited from your refund, you have to directly contact the particular agency and not the IRS or the FMS.
  • In case you and your spouse have filed joint tax returns, you may be eligible for all or part of the refund offset. This condition can only be applied in cases where your spouse is entirely responsible for the debt.

To seek your part of the refund, you need to file the injured spouse allocation form number 8379.


How is a Tax Refund Offset Challenged?

Tax refund offsets are no doubt, strong tools used by the government to ensure that you repay any of your defaulted loans.  The IRS has gets computed record of all borrowers who have defaulted.

Certainly, you can contest these offsets.


Are Student loans also under the purview of tax Offsets?

You can request for a hearing to challenge the tax offsets placed on federal student loans.


According to the IRS, you must appeal to the Department of Education if you desire to challenge an offset after it has already been done.

The Department of Education provides you with a list of main defences to tax offsets:

  • You have surely repaid your loan.
  • It is not your loan.
  • There is another reason why you do not owe the money.
  • You have entered into a repayment agreement with the loan holder and have been making payments as agreed to.
  • Despite filing for bankruptcy, the case is still open or the loan was discharged in bankruptcy.
  • Your school failed to pay you a refund that they owed you.
  • The borrower is dead or totally and permanently disabled.
  • A non-enforceable loan, probably because of forgery.

These are the main defences that you can keep in mind.  In the event that you wish for the offset to be kept on hold, while you are in the process of challenging it, you can file for a request for review at the address mentioned in the offset notice not later than 65 days after the date of the notice or within 15days of requesting for and obtaining your loan file.

Unpaid Child Support?

child support can also be intercepted by the government under the Federal Tax Refund Offset Program, also known as “project Intercept”.


Eligibility for Unpaid Child Support Offset Program:

Here you must be aware, that not every unpaid child support case can be intercepted.  There are certain minimum requirements for an individual’s tax refund to be offset for unpaid child support.  These can be listed as under:

  • The Individual must owe an arrear of at least $150 if the child support recipient also receives TANF (Temporary Assistance for needy Families).
  • The individual must owe an arrear of at least $500 in situations where the recipient does not receive TANF.

How does the unpaid child support program work?

The state’soffice of child support enforcement compiles a list of all the cases that are eligible for the federal Tax Refund Offset program.  This list is sent to the Treasury Departments’ Financial Management Service.

In addition, the FMS send in a pre-offset notice to the debtor, keeping them informed that either a part of the entire tax refund is scheduled to be intercepted and sent to the child support recipient.

Receipt of the offset refund can take close to six months.

In order to make an unpaid child support claim, you will need to contact your local child support enforcement office.


What exactly is the federal Offset Program?

The Federal Treasury Offset Program is a program that is centralized, and it is overseen by the Bureau of the Fiscal Service’s Debt Management Services (DMS).  This program aims to collect unpaid or overdue loans that are owed to federal agencies and states (like tax dues; Unpaid child support; non-serviced student loans etc.) in accordance with various applicable laws.

When is your debt sent to the Federal Treasury Offset Program?

Incases where your loan or debt repayment is delayed by more than 90 days, your name or file is sent to the treasury offset program (TOP).  Once the agency establishes that your debt is valid and can be enforced legally, you are sent notices intimating you resolve or challenge your debt.  During this time period, the agency is obliged to answer queries regarding your debt.

How Does TOP work?

There are agencies that handle the disbursement of federal payments, such as federal tax refunds, on behalf of payment agencies such as the Internal Revenue Service. “Creditor agencies,” such as the Department of Education, submit lists of unpaid debts to the Fiscal Service for collection and inclusion in TOP.  Such unpaid or bad loans are then certified as eligible for collection by offset after the required due diligence is carried out.

Payment agencies then prepare and certify the payment vouchers to Fiscal Service and disbursing officials, who then disburse payments. The payment vouchers contain information about the payment including the Tax Identification Number (TIN), and, name of the recipient.

2 people outside of a courtBefore a federal payment that has been deemed eligible and said payment is disbursed to the payee, disbursing officials compare the payment information with debtor information that has been supplied by the creditor agency, in the Fiscal Service’s debtor database.

If the payee’s TIN and name, match the TIN and name of a debtor, the disbursing official offsets (withholds) the payment, either entirely or partly, to service the debt.

Fiscal Service then distributes the amounts collected through offset to the respective creditor agencies. Fiscal Service maintains information about the defaulter, in the TOP debtor database.

Until such time that the creditor agency suspends or terminates debt collection, or offset activity for the debt, the fiscal services continue to offset eligible federal payments.

The creditor agency suspends collection under the following situations:

  • If the debt is subject to a bankruptcy stay or if other reasons justify suspension.
  • A creditor agency will terminate collection of a debt, in the event that the same is repaid in full, compromised, discharged, or if other reasons justify termination.

To summarize how the Treasury Offset Program Works:

  • When you have an unpaid loan or a debt with a government agency, that agency sends information about your debt to our database.
  • Before you receive a federal tax refund payment, the database is searched to see if you have any unpaid debt.
  • If your debt is listed in the database, Fiscal Service will offset (reduce or withhold) your federal tax refund payment to pay your debt.
  • When your payment is taken, aletter will be sent to you intimating you of the same.

What are the types of federal payments that are eligible for offset?

Listed below are the types of federal payments that are eligible for offsets:

  • Tax refunds.
  • Wages or salaries.  This includes military pay.
  • Retirement Benefits.  This includes military retirement pay.
  • Contractor and/ or vendor payments.
  • Travel advances and reimbursements.
  • Certain federal benefit payments, including Social Security benefits, Railroad Retirement benefits and Black Lung
  • Other federal payments which aren’t exempt by law or by action of the Secretary of the Treasury.

Federal law limits the amount that may be withheld from some types of federal payments.

So, what are the types of payments exempt from the Treasury Offset Program?

Following are the list of payments that are exempt from offset by disbursing officials:

Department of Agriculture Federal Cropinsurance indemnity payments
Department of Defense Survivorsbenefits payments
Department of Education Payments under a program administered by the Secretary of Education.
Department of Homeland Security Payments made under the Cerro Grande Fire Assistance Act
Department of the Interior


Payments under a program administered by the Secretary of Education under Title IV of the Higher Education Act of 1965
Department of Labor Longshore and Worker’s Compensation Act Payments Energy Employees Occupational Illness Compensation Program Payments Federal Employees Compensation Program Payments
Department of Labor/Social Security Administration Payments under the Black Lung Benefits Act, other than payments under Part B
Department of the Treasury Payments under the tariff laws
Department of Veterans Affairs Payments of benefits under any law administered by the Secretary of Veterans Affairs, including:

* Pension programs

* Parents= dependency and indemnity compensation programs

* Disability and death compensation

* Dependency and indemnity compensation

* Monetary educational assistance

* Monetary benefits under training (including work study                 allowances) and rehabilitation programs

* Special monetary benefits * Life insurance payments

* Funeral and burial expenses * Financial assistance for adapted housing and automobile               equipment

* Minimum income widow * Special allowance under 38 U.S.C. § 1312

Attorney fees withheld from retroactive benefits for                       representation at the Board of Veterans Appeals

* Clothing allowance

* Apportionment funds

* Accrued benefits


2 council tax_How will you know if you feature in the Treasury Offset Program Debtor Database?

Prior to referring a debt to the Treasury Offset Program, the creditor agency will have provided the debtor with all the required notices concerning the debt. These notices include:

  • Written notification of the type and amount of the debt.
  • The intention of the agency to collect the debt through administrative offset, and an explanation of the debtor’s rights (inspection, copying, review and repayment opportunities).
  • The creditor agency therefore will have informed the debtor of the referral of the debt to the Treasury Offset Program. Once in the Treasury Offset Program, the debtor will be informed by Treasury when as and when an offset is taken.
  • There may be other notices published or mailed to debtors.This happens only when Treasury determines that they are needed, but none are mandatory by law.
  • A person is also entitled at any time to inquire in writing whether he/she is in the delinquent debtor database maintained by Treasury and he/she will be answered in writing by Treasury.


How is a non-tax debt owed to the United States paid?

In the event that you have received a debt notice from the U.S. Department of the Treasury, you can pay your debt online. If you owe a delinquent student loan or for information on paying delinquent tax debt, visit the IRS website.

Pay.gov is a secure website where you can repay your debt, in case you have received a debt notice from the U.S department of Treasury.

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