Have IRS Debt? Get Help Keeping Your Refund!

A young woman sits at a desk in front of a computer pulling on her fair in frustration

Normally, the IRS will keep your refund to pay off old IRS debts.

This year, the IRS is letting people keep the part of the refund that is claimed as a Recovery Rebate Credit for a missed third-round Economic Impact Payment (the $1,400 stimulus checks that were issued last year).

Unfortunately, the IRS is going to keep people’s Child Tax Credits for past IRS debts, even if the person is claiming monthly Child Tax payments that they didn’t get last year. The IRS will also take Earned Income Tax Credits and will keep the taxes that were withheld from your wages, unemployment benefits, and retirement distributions.

If you are suffering a financial hardship and can’t afford to have your 2021 refund taken, our office may be able to help. The Taxpayer Advocate Service (TAS), an independent branch of the IRS, can request that the IRS issue an Offset Bypass Refund (OBR). An OBR is when the IRS issues your refund even though you owe them for a prior year.  The IRS will only issue OBR’s to people who can demonstrate financial hardship, such as utility shut-off notices or eviction notices for failure to pay rent.

Our office may be able to help you submit a request for an OBR to TAS. If you need an OBR, you have to wait to file your tax return until after the OBR request has been made to TAS.

You should also know that if you owe a non-IRS debt to another government agency (like child support, unemployment, or a student loan) unfortunately there is nothing the IRS can do to prevent your refund from going to that agency. In order to figure out if you owe any non-IRS debts, you should call the automated Treasury number at 800-304-3107 or visit https://fiscal.treasury.gov/top/. See if you can resolve the debt with that agency and get them to take off the IRS intercept before filing your 2021 tax return.

If you have a hardship and need to keep your refund, call our intake at 215-981-3800 between 9:30 am and 12 pm Monday through Thursday or apply online at https://philalegal.org/get-legal-help.