Tax Refund recapture or withholding
LIST Code: MO-09-03-01-00
LIST Code
MO-09-03-01-00
Title
Tax Refund recapture or withholding
Definition
Legal issues related to a tax refund being partially or fully withheld, intercepted, or recaptured by a government agency to pay debts or obligations. This includes situations where a taxpayer’s expected refund is applied to other balances instead of being paid directly to them. This issue covers refund offsets for obligations such as past-due child support, unpaid federal or state taxes, government benefit overpayments, student loans, court fines, or other legally authorized debts. Taxpayers may be surprised to learn that their refund was reduced or taken and may not understand which agency received the funds or why the offset occurred. It also includes disputes and questions about whether the recapture or withholding was lawful, accurate, or properly calculated. Legal questions may involve notice requirements, how to challenge an offset, requesting hardship exceptions, allocating refunds between spouses on joint returns, and correcting errors when the wrong debt was applied. Rules and remedies vary depending on the type of debt and the agency involved. Includes: - Tax refund offsets for child support or government debts - Withholding or interception of refunds by tax authorities - Notices explaining refund recapture or reduction - Disputes over incorrect or unauthorized offsets - Joint return issues where only one spouse owes a debt - Requests for review, correction, or hardship relief