The Treasury Offset Program (TOP) is a federal program that allows the IRS and other federal agencies to apply a taxpayer’s refund to unpaid debts. If a taxpayer owes back taxes, child support, student loans, or other government-related debt, the IRS can redirect their federal tax refund to cover the outstanding balance.
TOP can be used to offset:
- Back taxes.
- Unpaid federal student loans.
- Child support arrears.
- State income tax debt.
Taxpayers are notified of the offset through a letter explaining the debt and the amount applied from their refund. If the taxpayer believes the offset is incorrect, they can contact the IRS or the agency responsible for the debt to request a review or appeal the decision.
TOP ensures that government debts are collected efficiently, but taxpayers should be aware of outstanding liabilities that could result in an offset.