Out-of-Service Debt
Administrative Offset
Frequently Asked Questions

1. I was never advised of a debt to the Government. Why did you take my tax refund?
2. How will I know if my federal tax refund was intercepted to pay my debt?
3. Why is the amount that was offset by IRS different from the amount applied to my debt?
4. My spouse and I filed a joint tax return and our refund was offset for a debt that my spouse owes. Can I get my portion of the refund back?
5. Why are you taking my federal tax refund when I am already making payments on my delinquent debt?
6. Can you take my federal tax refund if I don't give you permission?

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1. I was never advised of a debt to the Government. Why did you take my tax refund?

Answer:  We send debt notices to individuals through the United States Postal Service using the mailing address provided by their former pay system or the debt originating office. If the postal service returns the debt notice as undeliverable, we attempt to obtain a current mailing address through the national credit bureau network and various other government databases. Whether or not a current mailing address is found, we are required by law to continue with the debt collection process. This may explain why an individual is unaware that their debt information was reported to commercial credit bureaus as a "collection account" or their Federal tax refund was intercepted. We are also required by law to report delinquent accounts to private collection agencies through the Department of Treasury.

 

Delinquent account information is reported to the United States Department of Treasury on accounts having no payments received within 62 days of the date of the initial debt notification letter. Under the Treasury Offset Program, delinquent accounts are subject to administrative offset (garnishment) of United States government funds due individuals from various sources such as Federal Income Tax refunds, federal salary offset, Office of Personnel Management annuity payments, and payments from other government agencies.

2. How will I know if my federal tax refund was intercepted to pay my debt?

Answer:   After a federal refund offset occurs, the Financial Management Service, the branch of the Department of Treasury that administers the Treasury Offset Program, will notify you that the offset has occurred. In their notification, you will be provided information regarding the amount and date of the offset.
3.Why is the amount that was offset by IRS different from the amount applied to my debt?

Answer:   The Internal Revenue Service charges a fee each year for processing the payment. This fee is deducted from the amount forwarded to us to offset your debt. This fee fluctuates on a yearly basis.
4. My spouse and I filed a joint tax return and our refund was offset for a debt that my spouse owes. Can I get my portion of the refund back?

Answer:  Yes, you can get your portion by completing IRS Form 8379 to claim your share of the refund. To obtain the form, call the Internal Revenue Service at 1-800-829-3676, or you can download this form here . If you have questions about the form or need help completing it, call your local Internal Revenue Service office or call 1-800-829-1040. The completed form should be mailed to the Internal Revenue Service center where you sent your original tax return. After they processes your claim, our agency will return the funds to the Internal Revenue Service, and they will issue you the funds. Your spouse's debt balance will be increased by the amount of funds returned.
5. Why are you taking my federal tax refund when I am already making payments on my delinquent debt?

Answer:  There are no provisions in the state and federal laws governing the Treasury Offset Program that prevent us from taking your refund if you are participating in an installment agreement or otherwise making payments on your delinquent account. An account is referred to the Treasury Offset Program if no payments are received within 62 days of the initial debt notification letter. Once an account is referred, it remains there unless DFAS management removes it. On a case-by-case basis accounts can be removed from Treasury Offset Program reporting; however, the account will be referred again if the account goes back into default status.
6.Can you take my federal tax refund if I don't give you permission?

Answer:  Just as we are not required to secure your permission prior to taking other types of collection action, such as referring your account to a private collection agency, we are not required to secure your permission prior to submitting your delinquent account to the Treasury Offset Program.