How to Request an IRS Refund Reconsideration After an Offset

Quick overview

When the federal government reduces your tax refund to satisfy other debts, the reduction is called an offset. Offsets can come from the Treasury Offset Program (TOP) or from the IRS itself when you owe past-due federal taxes. A “refund reconsideration” is the process of disputing that reduction and asking for the money to be returned when the offset was incorrect, already paid, or applied in error.

This article explains who you contact, the documents you need, a sample reconsideration letter, realistic timelines, and follow-up strategies that I’ve used in practice to help clients recover funds.

Who controls the refund and who you must contact

• If the offset was for a federal non-tax debt (example: defaulted federal student loans, federal agency overpayments), the debt is usually handled through the Treasury Offset Program. You must first contact the federal agency that referred the debt to TOP (e.g., Department of Education). See the Bureau of the Fiscal Service (Treasury) and CFPB descriptions for the program (sources below).
• If the offset was to satisfy past-due federal taxes, contact the IRS Collection department using the phone number or address on the notice you received.
• If the offset was for state debts (state income tax, unpaid child support), contact the state agency listed on the notice.

Note: The notice you receive about the offset is your starting point. It explains the reason for the offset and typically lists agency contact information. Keep that notice—do not discard it.

(For background on how offsets work, see our related page: How Offsets Work: When the IRS Applies Your Refund to Other Debts.)

Step-by-step: How to request a reconsideration

1. Read the notice carefully

• Confirm the reason for the offset and the agency that referred the debt. The notice will indicate whether the offset was applied by the Treasury Offset Program (TOP) or by the IRS for tax owed.

1. Gather documentation (be thorough)

• Proof you already paid the debt (bank statements, canceled checks, settlement agreements).
• Correspondence showing the debt was discharged, settled, or erroneous.
• Proof of identity theft, if applicable (FTC identity-theft affidavit, police report, IRS Identity Theft Affidavit).
• Prior-year tax returns, W-2s/1099s if the offset involved a joint return.
• A copy of the offset notice, and any correspondence from the agency that referred the debt.

1. Determine the correct recipient

• For TOP-related offsets: contact the federal agency that submitted the debt to TOP (the referral agency, not Treasury) using the contact info on your notice.
• For state offsets: contact your state tax or child-support agency.
• For offsets tied to federal tax debt: contact the IRS at the address/phone on the notice and/or the IRS Collection office.

1. Prepare a clear reconsideration package

• Write a concise cover letter (sample below). Include: your name, Social Security number (or taxpayer ID), tax year and form involved, a clear statement that you are requesting reconsideration/release of the offset, and a list of enclosed documents.
• Keep copies of every document.

1. Send the package and confirm delivery

• Use certified mail with return receipt or another tracked delivery method. Electronic submission methods vary by agency; follow the instructions on the notice.

1. Follow up and escalate if needed

• If you don’t receive acknowledgement within 30 days, call the agency and reference the certified-mail receipt.
• If the agency refuses to reverse the offset but you believe it was improper, ask about the agency’s appeal or dispute process. If necessary, file a formal administrative appeal with the referring agency.

1. If the offset involved a joint return

• If your joint refund was reduced because one spouse owes a debt, file IRS Form 8379 (Injured Spouse Allocation) to claim your portion of the refund. This is a separate process from disputing the underlying debt.

Sample reconsideration letter (fill-in-the-blanks)

[Date]

Agency Name
Address from notice

Re: Request for Refund Reconsideration — Offset on Tax Year [YYYY]
Taxpayer: [Full name]
SSN: [XXX-XX-XXXX]
Tax form and year: [Form 1040, tax year YYYY]
Offset reference or claim number: [from notice]

To whom it may concern:

I am requesting reconsideration of a refund offset applied to my federal tax refund for tax year [YYYY]. The offset was applied on [date] and reduced/withheld $[amount]. The offset was listed as being for [reason shown on notice]. Enclosed are documents that show this debt was paid (or otherwise resolved) on [date] and therefore the offset is incorrect. Please review the enclosed documentation and return the offset amount to me as soon as possible.

Enclosures (copies only):

• Copy of offset notice
• Proof of payment / settlement agreement dated [date]
• Bank statement showing payment
• Correspondence with creditor showing account is satisfied
• [Any additional supporting documents]

Please confirm receipt of this request and advise the expected timeline for review and any additional steps I should take. I am mailing this return receipt requested.

Sincerely,

[Signature]
[Printed name]
[Mailing address]
[Phone]
[Email]

Documentation checklist (quick)

• Offset notice (original or copy)
• Payment records or settlement agreement
• Identity documents (if identity theft is claimed)
• Correspondence with debt-collecting agency
• Tax return and supporting tax year documents
• Certified mail receipt and copies of mailed packet

Timelines & what to expect

• Acknowledgement: Agencies generally acknowledge receipt within 2–4 weeks if contacted by mail or phone. Get and keep any tracking numbers.
• Decision time: For federal TOP disputes, expect 4–12 weeks to resolve in routine cases; complex cases can take longer. In my practice, responses commonly arrive within 8–12 weeks, but it is not unusual for the process to stretch to several months if documentation or agency workloads slow the review.
• Interest: If the offset is reversed and your refund is returned, you may receive interest on the original refund amount, depending on how long the funds were held. Interest rules follow IRS and Treasury guidelines.

When the IRS can and cannot help directly

• The IRS will explain the offset on your notice but may not be the right office to reverse a TOP offset originated by another federal agency. The agency that referred the debt to TOP usually must clear the debt before funds are returned.
• If the offset was caused by a tax assessment or levy for tax owed, the IRS Collection office will be the entity to work with; you may be able to set up a payment plan or negotiate an offset release in special circumstances.

Special situations and strategies

• Identity theft: If identity theft caused a fraudulent offset, file an IRS Identity Theft Affidavit (Form 14039) and an FTC Identity Theft Report, and provide proof to the agency to expedite release.
• Settled debt: If you have a settlement agreement, include the signed settlement and proof of the settlement payment.
• Small-balance errors: For minor mistakes (misapplied payments, wrong SSN), document the error and press for an expedited review—small administrative errors are often corrected faster than complex liability disputes.

Common mistakes to avoid

• Sending only a one-line letter without supporting documents. Agencies need proof, not just claims.
• Missing deadlines or failing to use the agency contact printed on the offset notice.
• Throwing away the original offset notice—this notice contains the key reference numbers and contact info.
• Assuming the IRS/Treasury will automatically reverse the offset without action. You must initiate the reconsideration.

Practical tips from practice

• Track each communication in a simple spreadsheet: date mailed, recipient, tracking number, person spoken to, and summary of conversation. This creates a paper trail if escalation or judicial review becomes necessary.
• If you are short on time or the debt is large, consider a tax attorney or an experienced CPA—especially when federal agencies are involved or documentation is complex.

Related FinHelp resources

• For a broader how-offsets-work primer, read: How Offsets Work: When the IRS Applies Your Refund to Other Debts.
• For a step-by-step dispute relating specifically to student loans or state debts, see: How to Stop a Refund Offset for Student Loans or State Debts: Dispute Process.

FAQs (concise answers)

• How long before I get my money back? Typical decisions arrive in 8–12 weeks, but it can take longer for complex cases.
• Will I get interest? Possibly — interest may be paid on returned refund amounts per IRS/Treasury rules.
• Can I file suit? If administrative appeals are exhausted and the agency refuses to release funds improperly withheld, you may have legal remedies; consult a tax attorney.

Authoritative sources

• Treasury/Bureau of the Fiscal Service — Treasury Offset Program (TOP): https://www.fiscal.treasury.gov/top/
• IRS — Topic pages on refunds and offsets: https://www.irs.gov/ (search “offset” or “refund offset”)
• Consumer Financial Protection Bureau — information on government offsets: https://www.consumerfinance.gov/

Professional disclaimer

This content is educational and reflects general tax procedures as of 2025. It does not constitute legal or tax advice for your specific facts. For individualized guidance, consult a qualified tax professional, CPA, or tax attorney.