How to Know if the IRS Will Keep My Refund

Filing on time does not guarantee you'll receive your tax refund.

Filing on time does not guarantee you'll receive your tax refund.

There’s nothing like expecting a big federal tax refund to boost your spirits and pad your pockets with some extra cash. After all, you’ve paid taxes into the system all year long, so you deserve that refund. But before you start planning on how to spend the wad of cash, become familiar with the reasons the IRS may keep your refund. That way, you’ll feel less shocked if you learn that the money will never reach your bank account.

Past Returns

If you didn’t file a tax return in previous years and the IRS determines you owe money, you may receive one of those official letters from the IRS no one wants to see in their mailbox. This notice explains that the agency feels you owe taxes for the year you didn’t file, so they are holding your current year’s tax refund. To avoid losing your refund, explain why you didn’t file. Or, if you did file, explain on what dates, and prepare to send another copy of your return to the agency. Your refund might also be held if you still owe the IRS on previous returns, or owe fees from previous returns.

Student Loans

Making payments on your student loan is key to keeping those refunds coming each year. But slack off, and the U.S. Department of Treasury’s Financial Management Services may alert the IRS that your refund is needed to catch up on the delinquent loan. You’ll know for sure that the IRS has gotten wind of your delinquent student loan because you’ll receive a notice that explains how much money is being taken from your refund to pay it off. If anything is left over, the IRS will send the balance to you.

Child Support

If you are behind on child support payments, don’t be surprised if your refund never shows up. Even if your kids are 18 and leave home, you’re not off the hook –– you’re still obligated to pay past due child support until it’s paid off. If the IRS gets word that you didn’t pay in full, you may be standing at your mailbox for a long time waiting for the envelope with your tax return. If you are part of a joint return and your current spouse is behind on his own child support payments, you may still get some of the money. Once you receive the notice from the IRS about the refund being used to pay off child support, fill out IRS Form 8379 to request your portion of the refund.

Seek a Status Update

The IRS updates its database within four weeks of mailing your return via snail mail. If you file an e-return, the IRS updates its system within three days after receiving it. Then, you can call to find out the status of your refund, and find out when it’s being sent –– or not. The IRS also offers a free online and mobile service called “Where’s My Refund” that allows you to check the status of your return without having to be put on hold over the phone.


About the Author

Nancy Wagner is a marketing strategist and speaker who started writing in 1998. She writes business plans for startups and established companies and teaches marketing and promotional tactics at local workshops. Wagner's business and marketing articles have appeared in "Home Business Journal," "Nation’s Business," "Emerging Business" and "The Mortgage Press," among others. She holds a B.S. from Eastern Illinois University.

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