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Refund Offsets (Treasury Takes It Before It Hits the Bank)
If a taxpayer owes certain government-related debts, the IRS/Treasury can apply some or all of the refund to that balance before the deposit posts. That’s a federal offset.
Common offset triggers:
- Past-due child support
- Unpaid federal or state taxes
- Defaulted student loans
- Other federal/state agency debts
What to tell clients:
- If an offset happens, they’ll receive a notice showing how much was taken and who it was paid to.
- To check risk in advance, they can call the Treasury Offset Program: 800-304-3107
- Pro tip: Filing early doesn’t prevent an offset, but it helps you identify issues sooner and set expectations upfront.
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Refund Offsets (Treasury Takes It Before It Hits the Bank)
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