Experts advise taxpayers not to rely on the money they expect from the IRS. Sometimes the tax refund does not arrive as soon as they expect it because there are some issues the Internal Revenue Service needs to revise.
Or what could be worse, it may arrive on time but you see that it has been reduced. For your information, the Department of Treasury’s Bureau of the Fiscal Service issues IRS tax refunds. What is more, Congress also allows the BFS to carry out the Treasury Offset Program. It is through this program that BFS may reduce your tax refund amount and offset it to pay these 4 things.
4 reasons why you may see your IRS tax refund reduced
In the first place, the Internal Revenue Service claims that there are 4 reasons why you may see your 2024 tax refund reduced:
- State income tax obligations
- Federal agency nontax debts
- past-due child support
- certain unemployment compensation debts owed to a state (fraud)
However, you can always contact the Agency with which you have a debt to find out if it was submitted for a tax refund offset. But how will you receive the reduced amount tax refund?
IRS reduced tax refund
The Internal Revenue Service claims that any portion of your remaining 2024 tax refund after offset is sent in a direct deposit or check. Of course, it will depend on the way you requested on your 2024 tax return.
Many taxpayers wonder if they can receive a tax refund if they are currently making payments under an installment agreement. Or another IRS payment plan for a different federal tax season.
As a matter of fact, you cannot receive is tax refund if you are in that situation. In case you did not know it, the IRS will automatically apply any refund due to you against taxes you owe. It is one of the conditions of installment agreements.