Quick summary
If the Treasury has offset a federal payment in error, act quickly: identify the notice, gather proof, contact the agency that certified the debt, and ask for a review. In my practice helping clients recover intercepted refunds, speed and organized documentation are the two biggest factors that make a successful recovery more likely.

Step-by-step dispute options
1) Confirm the offset and read the notice

  • Look at the offset notice you received. It should name the certifying creditor agency and explain the basis for the offset. The Bureau of the Fiscal Service administers the Treasury Offset Program (TOP) and posts guidance on how offsets are certified and processed (U.S. Department of the Treasury – Bureau of the Fiscal Service: https://fiscal.treasury.gov/collections/treasury-offset-program/).

2) Administrative review with the creditor agency (first and fastest route)

  • Contact the agency that certified the debt (for example, a federal student loan servicer, HHS, or a state child-support agency). Most disputes are resolved at this level because that agency controls the account records. Provide a clear cover letter, copies of your offset notice, proof of payment (bank statements, cancelled checks), and any other supporting documents.
  • Many agencies offer a formal review or appeal process—follow the instructions on your notice and request the review in writing.

3) Request correction through the Bureau of the Fiscal Service

4) Special pathways: identity theft, bankruptcy, and hardship claims

  • If the offset resulted from identity theft, file an Identity Theft Affidavit (IRS Form 14039 for IRS matters) and provide that documentation to the creditor agency and Treasury. If you’re in bankruptcy and the debt was discharged, provide your bankruptcy documents to stop the offset.
  • If the offset creates immediate financial hardship, ask the certifying agency for expedited review and explain the hardship with evidence (rent notices, medical bills).

5) Escalation: agency appeals, complaints, and legal remedies

  • If administrative routes fail, you can:
  • File a complaint with the Consumer Financial Protection Bureau about debt collection practices (https://www.consumerfinance.gov/consumer-tools/debt-collection/).
  • File an oversight complaint with the Treasury Inspector General or the agency’s inspector general if you believe the agency certified incorrectly or mishandled your dispute (TIGTA for IRS matters: https://www.tigta.gov/).
  • Seek judicial relief. In some cases, taxpayers have asked federal courts for injunctive relief or damages when the offset violated statutory protections. Consult an attorney experienced in federal collection law for this step.

Evidence to gather (start immediately)

  • Offset notice and any related letters
  • Proof payments or payoff statements
  • Account numbers and correspondences with the creditor
  • Photo ID and Social Security documentation if identity theft is suspected
  • Bankruptcy discharge order if relevant

Timing and expectations

  • Deadlines and timelines vary by certifying agency. Many notices include a 30–60 day window to request a review; check your notice and start disputes immediately. Correcting an erroneous offset can take days to several months, depending on the agency and whether litigation is needed.

When to consult a lawyer

  • Consider counsel when recovery requires court action, when the agency refuses to acknowledge clear proof, or when the offset causes complex legal issues (bankruptcy, identity theft with cross-jurisdictional claims). In my work, early attorney involvement often helps at the escalation stage and can shorten resolution time.

Common mistakes to avoid

  • Waiting to act. Delays reduce your ability to collect and may forfeit administrative remedies.
  • Sending originals. Always send copies and keep originals safe.
  • Assuming the IRS or Treasury will fix errors without a formal dispute. You must usually contact the certifying agency or follow the appeal instructions on the notice.

Useful internal resources

Authoritative sources

Professional disclaimer
This article is educational and not legal advice. Specific eligibility, deadlines, and outcomes depend on your situation—consult a qualified attorney or financial advisor for personalized guidance.

Takeaway
Recovering funds after a wrongful Treasury offset is usually possible but requires fast, documented action: contact the certifying agency, submit proof, and escalate if needed. Keep copies of everything and consider professional help if the agency won’t correct an obvious error.