Why Your Tax Refund Was Taken
Some debts are subject to a tax refund offset such as past due to child support, state income tax obligations, federal agency non-tax debts (student loans), and unemployment compensation debts owed to the state. You will receive notice by mail to explain the reason for the offset and what agency it’s from. You can dispute the offset by contacting the agency that received the offset refund. The IRS can also help you can contact Taxpayer Advocate Service via phone 1-877-777-4778, or online click here to visit the website.
To find out if you owe any debts that could result in a refund offset call 1-800-304-3107. Be advised this hotline is updated daily and your status could change once your tax return has been filed. If you have called the hotline and were told you do have an offset contact the agency you have the debt with and work out a payment plan before filing your taxes. When you set up the payment plan make sure they specify how many on-time monthly payments have to be made until the offset is removed. Once those payments have been made you can now file your tax return with no worries about your refund being taken.
To help avoid these issues be honest with your tax preparer about your situation so they can help you make the best decision regarding your tax return.