Child Support Services: Federal Tax Refund Offset Program
- Federal Tax Refund Offset
- Whose tax refunds are offset?
- How do I know if my child support case was referred for federal tax offset?
- What can you tell me about the other parent's tax refund filing status?
- How do I know if my tax refund was offset for past-due child support?
- What if I don’t think CSS should have offset the tax refund?
- I filed a joint tax return but I am not responsible for the past-due child support debt.
- Where does the money go?
- How long are tax offset funds held?
- IRS Tax Refund Fraud
- How can I help if CSS thinks my tax refund offset is fraudulent?
- Legal Authority
- OKDHS Policy
- Further Reading
When the IRS reduces funds owed by the Federal Government to a taxpayer and instead sends those funds to pay toward the taxpayer parent’s past-due child support debt, it is referred to as an offset.
The Federal Tax Refund Offset Program collects past-due child support from tax refunds of parents who have been ordered to pay child support. This process is referred to as an ‘offset’. The process includes three federal agencies: The Federal Office of Child Support Enforcement (OCSE), the Financial Management System (FMS) of the Department of the Treasury and the Internal Revenue Service (IRS).
The Federal Tax Refund Offset Program was enacted by Congress in 1981 and was originally restricted to child support debts owed in public assistance cases (Aid to Families and Dependent Children (AFDC) or Temporary Assistance for Needy Families (TANF)). It was expanded in 1984 to include child support debts in non-assistance cases. The Federal Tax Refund Offset is mandatory for States and must be used if a child support case meets the criteria described below even if regular child support payments are being made.
Legal Authority: 31 CFR 285.3; 45 CFR 302.60; 45 CFR 303.72; 42 USC § 664; 42 USC § 657
DHS Policy: 340:25-5-215; 340:25-5-215.1; 340:25-5-225
Only child support cases receiving services through a state child support agency are eligible for Federal Tax Refund Offset. There are minimum requirements for a child support case to be referred for federal tax offset.
If your children received funds from a TANF or Title IV-E foster care program (public assistance cases) and you owe at least $150 in past-due child support, a referral will be made to the IRS for federal tax offset. If you owe past-due child support in more than one case, the case balances can be added together to reach $150.
If your children did not receive public assistance or only received Medicaid, and you owe at least $500 in past-due child support, your taxes will be referred for offset. If you have more than one child support case, the past-due balances can be added together to reach the $500 minimum owed.
Every September, CSS refers all eligible cases to the IRS. Referral balances and status are modified weekly throughout the year. If a case is referred to the IRS for offset, a Pre-Offset Notice will be mailed to the taxpayer. A tax refund can be offset for past-due child support even if the Pre-Offset Notice was not sent to your current address. You can also call the Customer Assistance Response Effort (CARE) to ask if Oklahoma child support has referred your case for federal tax offset.
The IRS has very specific guidelines that require State child support agencies to safeguard federal tax information (FTI), as explained in IRS Publication 1075 (.pdf, 173pp, 1.5 MB). Failure to safeguard taxpayers’ FTI is a violation of Federal law. Please understand that child support staff are limited by Federal law and cannot discuss the specific details of the other parent’s tax filing status.
If your tax refund is offset, FMS mails you an Offset Notice to inform that all or part of the tax refund will be applied to a past-due child support debt. The Offset Notice advises you to contact CSS to correct any errors or to answer questions about the offset.
Both the Pre-Offset Notice and the Offset Notice provide contact information for the CSS office that maintains the child support case. The Pre-Offset Notice is the first opportunity to dispute a tax refund offset. If you receive a Pre-Offset Notice, contact CSS to assist by reviewing the child support case to make sure the referral for federal tax offset is correct. Remember however, the referral is mandatory under Federal law if you owe the minimum amount of arrears. CSS can also help make arrangements to pay the past-due child support.
If a tax refund has been offset, an Offset Notice from FMS/US Treasury is sent to the taxpayer. There are three reasons to dispute a tax offset:
- If you are not the person listed on the Notice
- If the Notice contains an incorrect social security number
- If you don’t believe you owe past-due child support
If one of the above reasons applies to you, you must request a review of the offset. The review must be in writing and sent within 30 days from the date of the Offset Notice. The CSS office that works the child support case will review your request and notify you of their decision. If the criteria are met, a hearing will be scheduled for you.
The injured (non-obligated) spouse on a jointly filed tax return may be entitled to a refund of their share of a jointly filed federal tax return offset by CSS. CSS holds funds offset from joint returns for at least 180 days* to allow time for the injured spouse to file IRS Form 8379 (Injured Spouse Allocation). Form 8379 is filed with the IRS, not with CSS. For more information about this form, call the IRS at (800) 829-1040. For best results, the Form 8379 should be filed at the same time you file the joint tax return.
Federal law determines how any money that is offset from your tax refund will be applied to your child support case. The tax refund offset will be applied in this order:
- To the State if the children have received cash assistance in the past and a debt is still owed.
- To the parent owed past-due child support.
- If all past-due child support has been paid, any remaining amount will be returned to the parent who pays support.
Usually, the offset funds appear as a payment on the child support case the day CSS receives the funds. Offset tax refunds are held by CSS for at least 30* days if a single taxpayer filed the tax return. If two taxpayers filed a joint return together, the offset funds are held up to 180* days (six months). The reason CSS holds these funds is that all offsets are subject to future adjustments by the IRS.
OCSE and the IRS have advised of a significant increase in the number of fraudulent income tax filings resulting in fraudulent tax refunds. The IRS is identifying and investigating tax refunds that may be fraudulent. The fraudulent filings may be due to personal identity theft.
Since tax refunds can be directed to the state child support agencies for past-due child support, some of these fraudulent refunds have been offset by CSS. OCSE has authorized state child support agencies to hold tax refund offsets until the IRS completes their investigations. This may result in the offset being held for more than 180 days.
CSS is reviewing all tax refund offsets received from the IRS and placing holds on refunds that may be based on fraudulent tax filings. If fraud is suspected, CSS will send the taxpayer a letter requesting the person verify it is or is not their legitimate tax refund. The letter will be mailed to the address provided to the IRS when the tax return was filed.
CSS understands that holding a tax refund offset can be difficult to customers expecting to receive the offset or expecting to be credited for a child support payment. You can help us identify legitimate tax refund offsets so these payments can be released.
If you are the parent ordered to pay support and you received a Treasury Department notice that your tax refund was offset for past-due child support, please consult CSS pay records to ensure the amount of the offset has been credited to the past-due child support balances. If the child support balances have not been reduced by the amount of the offset it is possible the collection has been flagged as potentially fraudulent. If the collection is a result of a non-fraudulent tax filing, CSS needs your help to ensure proper credit is given.
If the tax refund is not based on a fraudulent filing, the hold is released and the payment is disbursed. When CSS is able to disburse the payment, it will show as paid the date CSS received the payment, not when CSS is able to verify it. Visit http://www.irs.gov/ to obtain more detail about the fraudulent tax filings and information on personal identity theft.
If we believe your tax refund is based on a fraudulent filing, Oklahoma Child Support will ask you to provide the following documentation:
- Copy of your picture ID
- Copy of the federal income tax return for the year of the collection (Form 1040)
- Your contact information (mailing address, e-mail address, and phone number)
The documentation may be mailed or delivered to a child support office in your community or they can be mailed to:
Department of Human Services
Child Support Services – State Office
Attn: Refund
P.O. Box 248822
Oklahoma City, OK 73124
You can also fax your documents to: (405) 522-6214.
Your refund cannot be applied to past-due balances until CSS receives this information.
If you did not file a recent tax return, or you believe that you are the victim of identity theft, you should contact the IRS
immediately at:
Internal Revenue Service
Identity Protection Specialized Unit
1-800-908-4490
For more information, view the IRS news release on identity theft prevention.
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Office of Child Support Enforcement (An Office for the Administration for Children and Families)
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Essentials for Attorneys in Child Support Enforcement, Chapter 9, page 231 et seq.
