Confused about IRS refund deposit amount not matching expected refund on transcript

This happens more often than you'd think. When there's a discrepancy between your expected refund and what actually gets deposited, it's usually due to an offset, which means your refund was applied to a debt you might have. The most common reasons for refund offsets include: unpaid federal student loans, back taxes (state or federal), unpaid child support, or certain federal non-tax debts. Even if you think you don't have any of these debts, sometimes there can be errors or debts you weren't aware of. Your next step should be to call the Treasury Offset Program at 1-800-304-3107. You'll need to provide your Social Security number, and they can tell you if your refund was offset and to which agency the money was sent. This is the fastest way to figure out where the missing portion went.

I went through something exactly like this last year! It was so frustrating trying to figure out where my money went. After calling the IRS multiple times with no luck (always busy or disconnected), I found this service called taxr.ai (https://taxr.ai) that helped me figure out what happened. You upload your tax documents and they analyze everything - they spotted that part of my refund had been offset for an old student loan I thought was paid off. They even explained which line items on my transcript were showing the offset that I completely missed! Saved me hours of stress and confusion.

Ok so I followed the advice about taxr.ai from the thread above and figured I'd give an update. I uploaded my account transcript and tax return and within about 20 minutes got a detailed explanation. Turns out I had an offset for a state tax debt from 2019 that I completely forgot about! The IRS codes on my transcript actually showed the offset but I had no idea how to read those codes. The analysis pointed out exactly where on the transcript it showed the money was sent to my state tax authority. Checked my state tax account and sure enough, there it was. Just sharing because it saved me hours of being on hold with the IRS. Now I at least know where my money went instead of wondering if it was an error!

Have you tried calling the IRS directly? I know it's nearly impossible to get through to them these days, but I used a service called Claimyr (https://claimyr.com) that got me connected to an IRS agent in about 15 minutes when I had a similar refund issue. They basically hold your place in line and call you when an actual human at the IRS picks up. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The IRS agent was able to see exactly what happened to my refund and explained there was an offset I wasn't aware of. Saved me days of stress and repeated calling attempts. Without this I would've been on hold for hours or getting disconnected constantly.

Ok I have to admit I was wrong about Claimyr. After posting that skeptical comment, I was desperate enough to try it myself the next day. Got connected to the IRS in about 20 minutes which is basically a miracle. The agent confirmed I had an offset for an old Department of Education loan that I thought was included in the forgiveness program. They gave me all the details including the exact amount that was taken out and which agency received it. Now I can follow up directly with the Dept of Education instead of wondering what happened. For anyone reading this with the same issue - definitely try calling the Treasury Offset Program first like someone mentioned above, but if that doesn't help, being able to actually talk to the IRS made all the difference.

Did you check your tax transcript for TC 898? That's the transaction code for refund offsets. It should list the amount that was offset and potentially give you more info. You can view your transcript online through your IRS account.

Has anyone noticed how many more offset issues there seem to be this year compared to past years? I'm an accountant and I've had at least 8 clients with unexpected offsets this filing season alone.