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My Tax Refund Has Been Reduced ("Offset"). Why?

What is a Tax Offset?

If you experienced a tax refund offset for the 2022 tax season, we can help you understand why this happened. First, you must know this can occur when the federal government withholds part of your tax return to pay off a debt. This is why you may end up getting much less of a refund than you had anticipated. Basically, if you owe money to the federal government because of delinquent debt, the Treasury Department can offset your federal payment or withhold the entire amount to satisfy the debt. The IRS continually emphasizes that they will notify the taxpayer in advance of any offset action to be taken. We get how this can create a lot of confusion, and now you’re probably asking yourself the questions “So what happened to my money?” & “What can I do about getting my money back?” Keep reading, we have provided the details on what actions you can take, and some of the resources that are available to assist you throughout this process.

What is TOP?

TOP stands for Treasury Offset Program. The Department of Treasury's Bureau of the Fiscal Service (BFS) issues IRS tax refunds and Congress permits BFS to operate TOP. Through the TOP program, BFS may reduce your refund (overpayment) and offset it to pay:

  • Past-due child support

  • Federal agency non-tax debts

  • State income tax obligations or

  • Certain unemployment compensation debts owed to a state (generally, these are debts for:

    • (1) compensation paid due to fraud

    • (2) contributions owing to a state fund that wasn't paid

Any part of your remaining refund after offset is issued in a check or direct deposited as originally requested on the return when you filed.

What Happens if My Money Was Already Taken?

First, you should reach out to the agency that holds your debt. You're also supposed to receive notice of your tax refund being offset from BFS. The notice will reflect:

  • The original refund amounts

  • Your offset amounts

  • The agency receiving the payment

  • Also, the address and telephone number of the agency

Still, many taxpayers don't receive this notice due to moving, no longer receiving mail in the same place, or just being flooded with the amount of mail they are receiving while struggling with debt. When these events happen, you may be able to legally request that some or all your funds be returned to you with a Tax Refund Offset Reversal. This is a process that allows a person to petition the agency that seized their funds and ask for them to be returned.

What to Know About Getting a Tax Refund Offset Reversal in 2022

There have been a lot of changes since the onset of the pandemic in 2020, especially with the federal government and the IRS. A lot of individuals and businesses experienced a lot of financial issues during that time so to help ease the stress, leadership changed the way that wages and tax refunds were garnished or offset. Borrowers ended up getting a break when federal income tax refunds were not offset for old student loan debt in 2020 and 2021. The U.S. Department of Education suspended the seizure of tax refunds, Social Security, and other government payments to cover money owed for defaulted student loans up until November. This means that those who receive tax refunds during the first part of the year will not be subject to having those refunds seized to offset the cost of their outstanding student loan debts.

This extension still gives many consumers time to plan accordingly, sort out their finances, and/or make agreements with agencies that they owe money to so that they can repay them when their financial situations improve.

How Do I Request a Tax Refund Offset Reversal in 2022? Do you think you might be entitled to this type of reversal? If so, follow these steps:

  • First, identify who took your refund. Contact that agency’s default resolution group to find out if a mistake was made, as well as what information they would require from you to prove your case.

  • Gather and submit that information to the organization and follow up to ensure that they received it. Once they have received your information, you’ll need to wait to find out if your petition is approved.

  • During this time, it may be wise to seek legal counsel, especially if you have reason to believe that your petition will be overlooked.

For any updates or changes about your tax refund, remember to log into your online account with the IRS.

Individuals may call 800-304-3107 with questions about a delinquent debt.

I Still Need Help! Who Can I Reach Out to For Guidance on the Refund Offset Reversal in 2022?

You are not alone. And we get it - looking forward to your tax return each year and not getting what you hoped for can put a major damper on your plans. Many families are searching for answers about why they received a tax refund offset on their tax refunds this year. At, we have the tax experience you need to navigate this process. We can help you understand your rights and responsibilities during these extraordinary times – and help you keep more of the money you are entitled to receive.

For more information, schedule a consultation with us today.

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