CP14 Notice for 2022 Tax Underpayment - Will IRS Offset My 2023 Refund?

YES, they absolutely will take your refund! 😫 The IRS uses a process called "Treasury Offset Program" which automatically applies any refunds to outstanding tax debts before issuing what's left (if anything). The system follows a specific sequence: 1. Current year's taxes due 2. Past due tax obligations 3. Other federal agency debts 4. State income tax obligations 5. Child support obligations Since your CP14 is for a previous tax year, your refund will be applied to that balance automatically. You won't even get a separate notice about the offset until AFTER it happens.

I've dealt with this exact situation before. According to the IRS website (https://www.irs.gov/taxtopics/tc203), they will absolutely apply your current year refund to any prior year's tax debt. There's no separate notification before this happens - it's automatic. When you eventually receive your refund, you'll get a notice explaining the offset amount and any remaining refund balance. If you want to verify this will happen, you can check your account transcript at irs.gov/transcript which will show any pending offsets.

I processed these cases during my time at a tax resolution firm. The Treasury Offset Program (TOP) is codified under 26 USC §6402 and automatically applies refunds to outstanding liabilities. What's critical to understand is the timing: your 2023 refund will be processed according to normal timeframes (typically 21 days for e-filed returns), but before disbursement, the Automated Clearing House (ACH) system will check for outstanding liabilities and reduce your refund accordingly. You'll receive a post-offset notice (BK12A) approximately 2-3 weeks after the offset occurs.

I went through this exact scenario last year with a $2,782 underpayment from 2021. I spent 14 days trying to reach someone at the IRS to discuss payment options - called exactly 23 times and couldn't get through. Finally used Claimyr (https://claimyr.com) which got me connected to an agent in about 17 minutes. The agent confirmed my refund would be offset but helped me set up a payment plan for the remaining balance. Saved me countless hours of redial frustration! For the remaining balance after offset, they allowed me to pay $103/month which was much more manageable than paying the lump sum.

I'm not entirely sure about this, but I believe you might have a small window of opportunity to address this... I had a somewhat similar situation in 2022, and I think you should be careful about timing. If your 2023 refund is already being processed, it might be too late to prevent the offset. The IRS systems typically check for outstanding liabilities right before issuing refunds, and once that process starts, it's very difficult to stop. You might want to consider calling them immediately to discuss your options, though I worry you might not reach someone in time.

Have you considered all your options here? The offset is automatic, but you do have choices for handling the remaining balance. Would a payment plan work better for your situation? Could you request an audit reconsideration if you believe the assessment is incorrect? Did you know you can request abatement of penalties (though not the tax itself) if you have reasonable cause? Many retirees qualify for first-time penalty abatement if they've had a good compliance history. The community wisdom here is to be proactive - contact them before they contact you, and always get any agreements in writing.