If you owe back income taxes, your refund can be taken to pay or offset the amount due. If anything is left, it will be refunded to you in the way you requested on your tax return, either by direct deposit or check. You should also get a notice from the IRS explaining why the money was withheld.
Will IRS keep my refund?
The IRS doesn’t automatically keep tax refunds simply because you didn’t file a tax return in a previous year. However, in some cases the IRS may keep your refund if you have not filed a prior-year return and it appears that you’ll owe money when you do.
What happens if you owe back taxes to the IRS?
You owe back taxes. If you owe back taxes, the IRS will take all your refunds to pay your tax bill, until it’s paid off. The IRS will take your refund even if you’re in a payment plan (called an installment agreement).
Can you receive a tax refund if you are on an installment plan?
Can I receive a tax refund if I am currently making payments under an installment agreement or payment plan for another federal tax period? Answer No, one of the conditions of your installment agreement is that the IRS will automatically apply any refund (or overpayment) due to you against taxes you owe.
Can a federal agency hold back your tax refund?
The same federal agency that issues tax refunds, the U.S. Department of the Treasury, also has the authority to hold back all or part of your refund to repay debts that you may owe. This is done by the department’s Bureau of the Fiscal Service. In bureaucratese, it is known as an “offset.” 1
Can a tax refund be taken by the IRS?
The IRS will take your refund even if you’re in a payment plan (called an installment agreement). But if you can’t pay your taxes right away, it’s always best to get into an IRS payment agreement to minimize penalties and interest, and prevent collection enforcement actions .
