IRS levy

Forum|Forum|5 years ago
March 5, 2021
1 reply
7 views

I owe the IRS $22,000.00 for tax year 2016. Do they automatically levy my State refund this year?

DavidD66

Level 15

Yes. It's called a Tax Offset. If you owe money because of certain delinquent debts, the IRS or the Department of Treasury's Financial Management Service (FMS), which issues IRS tax refunds, can offset or reduce your federal tax refund or withhold the entire amount to satisfy the debt.

If you owe federal or state income taxes your refund will be offset to pay those taxes. If you had other debt such as child support or student loan debt that was submitted for offset, FMS will take as much of your refund as is needed to pay off the debt, and send it to the agency authorized to collect the debt. Any portion of your refund remaining after an offset will be refunded to you.

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redskin13808Author

Level 4

Does it matter what state I filed the taxes in?

SundayInSalem

Level 8

The IRS cannot automatically take your refund. You were given incorrect information. You have the right to appeal.

If your state tax refund is levied, the state will issue a notice advising you of the levy. The IRS will also issue a notice, after the levy, offering you the opportunity to appeal the levy. The IRS notice will NOT be issued if you previously received a notice of intent to levy that advised you of your right to a hearing. The state and IRS notices refer you to call (800) 829-7650 or (800) 829-3903 for assistance.

The IRS can only go after refunds of states that participate in the State Income Tax Levy Program.

Federal and State Levy Programs