An intercepted tax return (refund offset) is confirmed by receiving a notice from the Treasury's Bureau of the Fiscal Service (BFS) explaining the reduction, checking the "Where's My Refund" tool on IRS.gov for a disclaimer, or reviewing your IRS online account. The notice will identify the agency, such as for child support or state tax debt, that intercepted the funds.
BFS will send you a notice if an offset occurs. The notice will reflect the original refund amount, your offset amount, the agency receiving the payment, and the address and telephone number of the agency. BFS will notify the IRS of the amount taken from your refund once your refund date has passed.
IRS procedures prior to garnishment
Once the IRS assesses your tax, you will generally receive notice and a Demand for Payment of the amount due. If you fail to pay this invoice, at some point after you will receive a Final Notice of Intent to Levy and a Notice of Your Right to a Hearing.
If you need more information on the offset, contact the Bureau of the Fiscal Service at 800-304-3107 (or TTY/TDD 866-297-0517) to find out where Treasury applied your tax refund.
The IRS is considering changing an amount on your tax return, due to an examination after it processed your tax return. This is called an audit. If it audits your return, the IRS will notify you by mail, and the notice will tell you if the audit will be handled by mail or in person.
Audit odds are low, but the IRS uses automated programs to identify issues. Common red flags include unreported income and excessive deductions. High earners and digital currency users may face extra scrutiny. Maintaining strong records and specifical documentation can help prevent issues.
Suppose you are concerned about any tax offsets that may be pending on your social security number. In this case, the Internal Revenue Service (IRS) provides a useful toll-free number, (800) 304-3107, which allows you to quickly and conveniently obtain information regarding any offsets.
Do garnishments show on a pay stub? Yes, employees can access information about any garnishments withheld from their earnings under the “deductions” or “other deductions” section of their pay stub.
Garnishment applies to your net income. This is the amount of your income left after required deductions such as taxes and Social Security contributions. Earnings contributed to deductions not required by law, such as contributions to a pension or life insurance policy, still count as part of your gross income.
You can check the status of your refund with “Where's my refund?” on IRS.gov or the IRS2Go mobile app.
The Pre-Intercept Notice allows the debtor to resolve or dispute the debt before you intercept their funds. The notice requirement applies to each new debt incurred after you submit the account and before you increase the requested intercept balance.
Intercepted federal tax refunds pay debts that are owed to the state first, and then pays the past-due support owed to the family. If the family no longer gets cash benefits, and no birth costs or AFDC debts are owed, the family will get the intercepted tax refund.
You may also find information about debts that have been referred to TOP or payments that have been offset by calling the TOP Interactive Voice Response (IVR) at 800-304-3107.
Here's how you can check your wage garnishment balance:
The law requires trades and businesses report cash payments of more than $10,000 to the federal government by filing IRS/FinCEN Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business PDF. Transactions requiring Form 8300 include, but are not limited to: Escrow arrangement contributions.
Not reporting all of your income is an easy-to-avoid red flag that can lead to an audit. Taking excessive business tax deductions and mixing business and personal expenses can lead to an audit. The IRS mostly audits tax returns of those earning more than $200,000 and corporations with more than $10 million in assets.
Businesses that show losses are more likely to be audited, especially if the losses are recurring. The IRS might suspect that you must be making more money than you're reporting. Otherwise, why would you stay in business? Most likely to be audited are taxpayers reporting small business losses.
Here is a list of things a tax scammer will do but The IRS will never do: