Will they definitely offset my tax refund?
I filed my tax refund on jan 22 and found out that my ssn was flagged for an offset due to a defaulted student loan. I called the collection agency and was told that they only take out what you owe as of the date that i received the letter warning me of possible offset. Therefore i will still owe the remainder. show more I filed my tax refund on jan 22 and found out that my ssn was flagged for an offset due to a defaulted student loan. I called the collection agency and was told that they only take out what you owe as of the date that i received the letter warning me of possible offset. Therefore i will still owe the remainder which is basically collection cost and that it would keep collecting interest. The guy in charge of my account couldn't tell me exactly what they will be taking out of my refund but he was so quick for me to make payment arrangements for the remainder (i couldn't do it that day because the due date for my first payment would fall 5 days before my next payday). why would he want set up a payment arrangement without even knowing how much i will owe? could it because they may not actually offset my return this year? and he was trying to get me on a payment arrangement just in case?
Best Answer: First of all the only reason you received your refund last year even after you received the letter stating your refund could be offset is by law a collection agency has to give you time to react to the letter stating they intend to offset your return, and depending on the company it could be between 90-180 days from the date of the letter.
Now everyone I really don't know if this is what you will want to hear but this is what will happen to your refund if you have an offset pending, and I know because it happened to me last year!
I had a student loan from years ago that had been sent to a collection agency, well the collection agency sent a request to the IRS for my refund to be intercepted (Offset) last year for the entire balance of my student loan in default and the total at that time was $5,267.39.
Then the IRS Offset my entire refund of $2,030.00 and sent it to the collection agency, which in turn sent the payment to the people that guranteed my student loan, so I DID NOT GET A SINGLE PENNY OF MY REFUND, but it did reduce my balance owed to my student loan by $2,030.00.
Now with that being said here's how you will know for sure if your refund will be "Offset" or not?
Call "FMS" at 1-800-304-3107 and it will prompt you to the point where you can enter your "SSN" and if the recording comes back with a name and phone number of an agency that has requested an offset of YOUR refund, then your refund has been flagged and WILL BE OFFSET by the entire amount requested.
Now if you owe less than your refund, you
will receive the difference, but if you owe more than your refund then you will NOT receive anything but a letter from the IRS stating your refund was offset and to what company!
Also to answer the question the person had that filed their return on Jan22, I know you say that you called "FMS" and was told that your refund was flagged, well I hate to tell you but that means your NOT getting a refund, and the reason I say this is you said when you called the person you talked to tried to set up a payment plan, now this tells me you owe more than your refund, so that means you will not get back a single dime!
Furthermore the reason the guy in charge of your account couldn't tell you exactly what they will be taking out of your refund is he don't know if you have more than 1 offset on your refund or not, but if you only have the single offset with his company then you can take the balance he gave you on your account, then subtract your entire refund and that will give you your net balance?
(Anyone else that may be reading this then that will leave you with a positive balance meaning you'll get back what's left over from your refund, or a negative balance meaning you'll still need to make payments until paid in full)
In closing there are a few things most of you can do in order to keep your refund from being offset?
1. DON'T FILE YOUR RETURN UNTIL YOU ENROLL IN A LOAN REPAYMENT PROGRAM.
2. People don't say you can't afford to make payments because what you really CAN'T afford is to lose your entire refund.
3. If you call the number listed above and it tells you that your refund will be offset then it will give you what company and their number that has requested an offset of your refund an in order to stop this you MUST call them and tell them you would like to enroll in a "Student Loan Rehabilitation Program" and if you qualify after as few as 4-6 small payments your offset will be lifted provided you continue with your timely payment, but if you have already filed your refund then it's to late.
4. However if you wait till April 15th to file your return and have enrolled in a loan repayment program, then if your refund is offset then you have a great chance to receive a refund, and I know because even though I lost my entire tax refund of $2,030.00 to my student loan, when it was time to get my stimulus payment of $900 that was intercepted (offset) too, however it was refunded to me since I was in a loan repayment program!
I HOPE THIS HELP YOU ALL. )
Source(s): This happened to me last year and above are the steps I took to get back my stimulus payment, and this year I got back my entire refund even though I still owe $2,037.67 on my student loan because I am in a loan repayment program!
Wacey J · 7 years agoSource: answers.yahoo.com