5 Reasons Why the IRS May Think You’re an Injured Spouse

Each year, millions of taxpayers anxiously await the receipt of a W2. This little piece of paper essentially equals a large chunk of change for many taxpayers, who use the money to catch up on bills, pay off credit cards, or to make a big-ticket purchase. In 2014, the Internal Revenue Service (IRS) issued more than 48 million refunds and together, taxpayers got back more than $146.91 billion from the government.

Instead of receiving a payment, however, some taxpayers receive a notice in the mail from the Financial Management Service (FMS) indicating that their refund has been offset, or in essence, taken. These taxpayers usually owe some sort of debt to a government entity. Offset generally does not occur as a result of one or two late payments. In most cases, a debt has to be seriously delinquent to get to this point. Oftentimes, a taxpayer is already aware of the possibility of offset and around tax time, they are ready to pick up the phone and call the Treasury Offset Program Hotline to find out to whom, if anyone, they owe debts.

If this sounds like you, you may have a few options if you filed a joint return. First, you can allow the money to be taken. It will go to the entity to which you owe a debt and it will count as a payment, albeit an involuntary one. You can then work toward preventing offset in the future. Prevention comes in the form of coming up with come sort of payment arrangement and working to repay the debt so you can receive future tax returns. On the other hand, if the debt only belongs to you or your spouse and not to both of you, you may have some ammunition in the injured spouse allocation.

Examine these criteria. If you fit all of these, you may be an injured spouse and be entitled to receive your portion of your tax return.