The IRS can seize some or all of your refund if you owe federal or state back taxes. It also can seize your refund if you default on child support or student loan debts. If you think a mistake has been made you can contact the IRS. There are six reasons the IRS can seize your refund. Here’s what they are, and what you can do about it.

What can the government do with your tax refund?

The Treasury Department also can garnish your Social Security or Social Security Disability Insurance (SSDI) benefits to collect back debts. If you owe back income taxes, your refund can be taken to pay or offset the amount due.

What to do if you get a refund from the IRS?

Whatever is left, if anything, 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. If you believe that a mistake was made, you will need to contact the IRS.

What happens if you owe back taxes to the IRS?

You Owe Federal Income Taxes . If you owe back income taxes, your refund can be taken to pay or offset the amount due.

Can a collection agency seize your tax refund?

Fortunately, certain nontax debts can’t affect your tax refund. The IRS cannot seize your refund for: Collection Agencies. No collection agency or creditor can intercept your refund without a lien or add to any existing tax debt. However, the IRS does use private collection agencies.

Why does the IRS take your tax refund money?

If you owe money to other federal agencies, TOP can take money to satisfy these debts. These include past-due or defaulted federal student loans, payments on HUD loans, and any fines, penalties, or fees due to other federal agencies. 3. State Income Tax Debts

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