Can I Avoid a Tax Offset?

Tax offsets are difficult for many that are living on a fixed income and have unpaid debts that require additional support through federal or state income tax returns. While some may feel that paying through this manner is beneficial to avoid garnishments to monthly paychecks, there are several that may need to try to avoid a tax offset.
When a person is unaware of an offset or does not understand what a tax offset is, he or she should contact the Financial Management Service for more details. The service authorities will explain what the person owes, how much and why the offset is necessary. If the debt is not valid or the payment is already on the way, the FMS will need to confirm this. Some debts are not legitimate, and the taxpayer will need to communicate these details. Without contact, the offset will occur, and the person may face financial difficulty. While the FMS will supply the information, communication is necessary with the agency needing the debt.

Spouse-Related Debts

Some tax returns file with both spouses, and only part of the refund requires an offset. This is possible if only one spouse has a debt that needs repayment in this manner. When this is the case, the person may receive part or all of his or her tax refund and avoid the tax offset. This is due to the responsibility of the other spouse for the repayment. In these situations, the affected individual will need to contact the Internal Revenue Service and file an Injured Spouse Allocation form. This should start the process for a partial or whole tax return refund.

Financial Hardship

When a person is facing financial difficulties, he or she may contact the IRS for a form or use the online website to fill out the necessary documentation. This may help prove to the government that the individual is not able to manage economic matters without receiving the income tax return. This could help the person avoid the tax offset and ensure that the refund comes to the person wholly without any garnishment for debts owed to agencies. It is important to take these steps when the taxpayer does owe debts. There are several other resources available to those that look online or contact the IRS, Treasury Offset 
Program of the FMS.

In order to stop a tax offset and watch a tax return garnishment occur, the person needs to prove financial hardship. This is through documents or paperwork online or filled out and turned in. With this process, the IRS will not take the return but provide the monies to the taxpayer. He or she will need to fill out an IRS Form 911. Asking for help requires the for and contact with the Taxpayer Advocate Office. This is an intermediary office that goes between the taxpayer and the IRS. The agents within this department provide help and may answer questions about the procedure.

Filing the 911 IRS Form

After filling out the form, it is time to submit it to the office that is either physically closest to the applicant or by faxing it in. The details are available through the Taxpayer Advocate Office. An agent usually calls the person for more details or to set up the case. Sometimes this only takes up to two business days after the request initiates. Then, the individual needs to prepare the 433-A IRS Form. This is what the agent will use in his or her determination if the person legitimately does go through financial hardship. Monthly bills must surpass the monthly income in standard situations.

After the forms, it is time to work closely with the agent. Any and all requests are important, and the person needs to follow them. Additional documentation or forms of support claims may become a requirement as proof of financial hardship. The agent will keep all paperwork updated to reflect the most current issues. The department will inform the taxpayer of the processes and what occurs at each stage. However, it is crucial to refrain from filing the tax return until the agent processes the case fully. An approval is necessary.

Legal Help to Avoid a Tax Offset

Sometimes, it is necessary to hire a lawyer. A legal tax professional is often beneficial to assist with these matters and clear up confusion, complications and tax offset matters. He or she may need to inform the individual of certain forms to fill out, contact others and help the person progress through the case.