If you owe federal taxes from a prior year audit will the irs take it out of this years refund. And if so will that take longer to receive your refund?

renkengrl · ‎May 31, 2019

I was audited for a prior year. During that audit they found a mistake I had made. I owe money to them for that mistake. Can they or will they take it from this years refund? And if so can that delay a refund?

SusanG · ‎May 31, 2019

In general the IRS can collect past due account balances, say from an audit adjustment for a prior year, from a taxpayer's current refund. While I can't directly speak to when your refund will arrive, in very general terms taxpayers who find themselves in this position receive any amount which exceeds the amount collected within a normal period of time.

So if a taxpayer owed $200 for a prior year and their expected refund was $800 for the current year, they could expect to receive the difference of $600 without a significant delay assuming the return was correct as filed.

Taxpayers will also receive a letter from the IRS explaining why the amount refunded was different from the amount of refund listed on the return within 4 to 6 weeks. This letter will state what tax and tax year the difference, or amount kept from the original refund, was applied to.

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SusanG · ‎May 31, 2019

In general the IRS can collect past due account balances, say from an audit adjustment for a prior year, from a taxpayer's current refund. While I can't directly speak to when your refund will arrive, in very general terms taxpayers who find themselves in this position receive any amount which exceeds the amount collected within a normal period of time.

So if a taxpayer owed $200 for a prior year and their expected refund was $800 for the current year, they could expect to receive the difference of $600 without a significant delay assuming the return was correct as filed.

Taxpayers will also receive a letter from the IRS explaining why the amount refunded was different from the amount of refund listed on the return within 4 to 6 weeks. This letter will state what tax and tax year the difference, or amount kept from the original refund, was applied to.

elle_krepps · ‎May 31, 2019

What if I was married during the year we were audited (in 2011 they found discrepancies for both of us) and this year we are filing separately. Me, married filing separate and he is filing HOH. Will they take his debt owed from him and mine from me and will the change in status and also owing a debt delay our returns?

SusanG · ‎May 31, 2019

Since this was a debt from a MFJ return, the debt may be collected in full from whomever the IRS can collect it. This means the IRS feels you both are equally responsible for the debt. This means the IRS may try to collect 100% from each of you until the debt is paid in full. So if the debt is covered in full by your refund and you file first, the IRS may collect the entire debt from your refund. Does this make sense?

elle_krepps · ‎May 31, 2019

It makes perfect sense and it's what we expected. Thank you for your help!

SusanG · ‎June 10, 2019

Since this was a debt from a MFJ return, the debt may be collected in full from whomever the IRS can collect it. This means the IRS feels you both are equally responsible for the debt. This means the IRS may try to collect 100% from each of you until the debt is paid in full. So if the debt is covered in full by your refund and you file first, the IRS may collect the entire debt from your refund. Does this make sense?

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If you owe federal taxes from a prior year audit will the irs take it out of this years refund. And if so will that take longer to receive your refund?