You may have received a Notice of Intent to Offset, especially if you have an amount of unpaid back taxes. If it is your first time receiving this notice, then you may still be confused about what it is. In this article, we will talk to you about the Notice of Intent to Offset, what it may do to you, and what you can do about it.
What Is a Notice of Intent to Offset?
Just as the name suggests, it is a notice to tell you that you owe back taxes or some money to a government agency, which they will “offset” using your tax refund. This means they will be seizing your tax refund and using it to pay any money you owe.
Only a portion of your tax refund may be seized, depending on the scenario. However, some cases may take away the entire tax refund. These details will be found in the notice you have received.
Who Sends the Notice of Intent to Offset?
It is not the IRS that sends these notices. Instead, it is the Bureau of Fiscal Service. The Bureau of Fiscal Service is the governing body responsible for processing payments from federal agencies. This processing will include your tax refund.
The Bureau of Fiscal Service gets all information about your federal finances, including any delinquent debts, to creditor agencies, especially federal obligations. They will run your tax identification number, and when they see that you have a backlog of unpaid debts, then they send you the Notice of Intent to Offset.
What Happens When I Get a Notice of Intent to Offset?
As mentioned above, when you get a Notice of Intent to Offset, your tax refund will be seized to pay off your outstanding debts. You will not be receiving any of your tax refunds or will only gain a portion of it if you have received this notice. However, at the same time, your debts will decrease as it has been paid off by the Bureau of Fiscal Service using the tax refund that they have confiscated from you.
What Can I Do If I Get a Notice of Intent to Offset?
If you get a Notice of Intent to Offset, you can take a few steps. The things you need to do depend on the specifics of your situation.
First, if you are sure that you do not have any back taxes or unpaid debts with government agencies, you will need to verify the information. Make sure to check the Notice of Intent to Offset to see if it was meant for you. If it seems to have been sent in error, contact the Bureau of Fiscal Service immediately.
If the letter is meant for you, you can fight the intent. Simply contact the agency that states that you owe them money immediately. Let them know that you do not know anything, and be ready with receipts and documentation you may have.
However, if you owe some back taxes, the best thing you can do is nothing. Your tax refund will be offset and help pay off what you owe.
Yet, you can still fight it if needed, especially if you are short on cash. Just contact the governing body where you owe the money and ask them what they can do for you. Depending on the agency, some may waive the fees, offer deadline extensions, or do completely nothing. It is best to contact the agency upon arrival of the Notice of Intent to Offset.
A government notice may seem scary, but you will know what to do as long as you are aware of it. Make sure to pay your taxes on time, when you can. It is also essential to always set aside some money for taxes because you can still pay your taxes, even when you lose your income.
Owing some money in taxes is nothing to be ashamed of. However, you may need some tax relief solutions. We at the Axiom Tax Resolution Group want nothing more than to help you resolve these tax issues, as we service the Birmingham area in Alabama. Contact us today if you need some tax relief!