Treasury Offset Program (2024)

FAQs

What is the Treasury Offset Program? ›

The Treasury Offset Program (TOP) collects past-due (delinquent) debts (for example, child support payments) that people owe to state and federal agencies. TOP matches people and businesses who owe delinquent debts with money that federal agencies are paying (for example, a tax refund).

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.

(Holding back money from a payment is call "offsetting the payment" or "administrative offset.") For example, if you have a delinquent debt for a federal loan, TOP can reduce your federal tax refund or social security benefit payment to pay that debt.

A debtor who wants to avoid offset by paying the debt must pay the agency to which the debt is owed. The agency will then tell Treasury to stop the offset process for that debt.

If you owe a federal tax debt from a prior tax year, a debt to another federal agency, or certain debts under state law, the IRS may keep (offset) some or all your tax refund to pay your debt. In fact, in many situations the IRS is legally required to forward your refund to pay the debt.

Pay the debt in full

For any changes to your balance for payments you make to us, we send updated account information to BFS weekly. Allow a minimum of 2 weeks for an offset to show on your account.

A tax offset is when your tax refund is withheld to pay your tax balances. If you have past-due taxes or a balance from another government agency but you're eligible to receive a refund this tax season, the IRS — or state tax agencies — may apply that refund to your past-due balance.

If the tax refund has already been applied to the prior tax obligation, the IRS will not reverse the offset unless there was a clerical error. See IRM 3.17. 79.3.

(updated December 22, 2023) All or part of your refund may be offset to pay off past-due federal tax, state income tax, state unemployment compensation debts, child support, spousal support, or other federal nontax debts, such as student loans.

For individuals who establish a payment plan (installment agreement) online, balances over $25,000 must be paid by Direct Debit. See Long-term Payment Plan below for other payment options.

Can the government take your Social Security if you owe back taxes? ›

Under the FPLP, the IRS can garnish up to 15% of your Social Security benefits each time you receive your check. The IRS will apply this amount to your taxes owed. The IRS will continue to garnish your benefits until you pay your back taxes in full.

To inform staff that Franchise Tax Board (FTB), in keeping with the Governor Gavin Newsom's March 12, 2020 executive order, has temporarily suspended the collection activities of the Interagency Intercept Collections (IIC) , Federal Treasury Offset Program (FTOP) & Multi-offset Programs (MOP) through July 31, 2021, to ...

The Department of the Treasury will notify you by mail when a federal offset occurs. The letter includes the amount and date of the offset, and EDD contact information.

Answer: The IRS Hardship Program, also known as the Currently Not Collectible (CNC) status, is a program that provides temporary relief to taxpayers who are experiencing financial hardship and cannot afford to pay their tax debt.

Though the 37-month COVID-19 payment pause ended Oct. 1, 2023, the U.S. Department of Education will delay tax refund offsets until at least September 2024. If you've defaulted on student loans, though, you'll need to enroll in the Fresh Start Program before Sept. 30, 2024, to avoid future refund offsets.

An offset is when the federal income tax refund you would have received is used to pay all or a portion of a debt owing to a federal or state agency. If the full amount owed is not collected in one year, future offsets may be done to satisfy your debt.

The Treasury Offset Program is a debt collection tool that allows the federal government to collect income tax refunds and certain government benefits (for example, Social Security benefits) from individuals who owe debts to the federal government.

The intent to offset notice is a letter that the IRS sends out to taxpayers when the agency plans to keep their tax refunds and apply them to outstanding debts. You may also receive a notice of intent to offset if the government decides to take seize a federal payment due to unpaid liabilities.