If an individual owes money to the federal government because of a delinquent debt, the Treasury Department can offset that individual’s federal payment or withhold the entire amount to satisfy the debt.
Bypass refund offset
Hey, my fiance’s federal tax refund status was updated yesterday to the “Your refund has been applied to a past due obligation” etc. statement, and I am now trying to figure out if there is anything we can do to change this. A few years ago I suggested to her that she try out college with me and take out student loans to help us out (we hadn’t had stable living circumstances up until only a few months ago) and it came back now to bite us in the butt because they defaulted (she only went for a year and realized it wasn’t for her). We had a baby back in September and finally got into our own place shortly after, so our budget has been a bit tight, between having full responsibility of bills and a child to take care of, on top of other basic living expenses. When I filed her taxes for her, we were shocked to see how much she would be getting back due to the earned income and additional person credits, and we’ve been feeling pretty good the last month that we would be able to live comfortably for a while and get our daughter things she would need essential for learning (jumper, walker, etc.). Well the Where’s My Refund tool had stated that the refund would be sent to the bank on the 23rd and to contact them if it wasn’t in by he 28th. It wasn’t deposited, and when I checked this morning it was updated again with the bad news. So now we are a little bit stressed out because come April we will be putting our daughter in daycare because I will be returning to my landscaping job. On the bright side, at least her debt would be cleared a little bit, but I’m mostly thinking about our daughter and how we’ll get by with daycare. I’ve done a little bit of research about requesting a bypass, but I don’t know if we have a legitimate reason to get one. If they were to refund it, even half, we would have no problew then making payments towards the debt, but again I don’t know if we have a legitimate reason to get it back. I’m feeling pretty stupid right now for having made that mistake in the past that is affecting us now, but unfortunately I can’t go back and change it. Does anyone have any advice that might help, or are we pretty much screwed on the refund? Also, how will this affect her credit? Will that make a negative mark since they basically had to force taking the money? Any help would be very much appreciated.