Confused why IRS deposit is significantly less than expected refund amount

This definitely indicates that the IRS has offset part of your refund for some reason. There are several common reasons this happens: 1. Past-due federal tax debts 2. State income tax debt 3. Child support obligations 4. Federal student loans in default 5. Certain other federal non-tax debts The important thing is that you should have received a notice explaining the offset. It typically comes separately from your refund, and sometimes arrives a few days after the deposit. Check your mail carefully for the next week or so. If you don't receive a notice, you can call the Treasury Offset Program at 800-304-3107. You'll need to verify your identity with your Social Security Number, and they can tell you which agency claimed your refund.

I went through this exact same situation last year! My refund was supposed to be $3,452 but I only got $1,890 deposited. I was freaking out because I had big plans for that money. I spent HOURS trying to get through to the IRS with no luck. Then I found this service called taxr.ai (https://taxr.ai) that helped me figure out exactly what happened. They analyzed my tax transcripts and found the specific code that showed my refund had been partially offset for an old utility bill from 5 years ago that went to collections and I completely forgot about! The weirdest part was that the IRS notice about the offset came like 2 weeks AFTER my deposit. The taxr.ai service helped me understand exactly what happened without waiting on the IRS. They also showed me how to file a dispute since the utility company had actually applied someone else's debt to my account!

Just wanted to update everyone! I tried taxr.ai after posting my skeptical question and WOW... I'm impressed. I uploaded my transcript and within minutes found out exactly what happened to my refund. Turns out the IRS applied part of my refund to an old medical debt from 2020 that I had completely forgotten about. It had gone to collections and I moved several times so never got any notices. The service even showed me the exact date the debt was reported to the Treasury Offset Program. Saved me hours of waiting on hold with the IRS and now I can actually address the issue instead of being confused. Just thought I'd share since it actually worked way better than I expected!

After seeing your post, I remembered going through something similar back in 2023. Called the IRS non-stop for 3 weeks and never got through. Was pulling my hair out! A friend recommended this service called Claimyr (https://claimyr.com) that basically waits on hold with the IRS for you, then calls you when they get a live agent. I was super skeptical but checked out their demo video (https://youtu.be/_kiP6q8DX5c) and decided to try it. They got me through to an actual IRS agent in about 45 minutes when I had been trying unsuccessfully for weeks! The agent explained that they had offset my refund because of an old tax debt from 2019 that I thought I had paid. Turns out the payment went to the wrong tax year because I used the wrong payment voucher. If you haven't received your offset notice yet, this might save you weeks of frustration trying to figure it out.

Just wanted to admit I was completely wrong about Claimyr. After posting my skeptical comment, I spent another entire day trying to reach the IRS with no success. Out of desperation, I tried the service. Within 70 minutes, I got a call connecting me to an actual IRS representative! She explained that my refund was reduced because of a defaulted student loan from 2018 that I thought had been included in the pandemic pause. Turns out it was a private loan that didn't qualify. I wish I hadn't wasted so many hours trying to call myself. Lesson learned - sometimes these services exist because they actually solve a real problem. My issue is resolved now and I know exactly what happened to my refund.

Something similar happened to my sister last year. Check if you have any past due child support, student loans, or other federal/state debts. The Bureau of Fiscal Service handles offsets and takes money from tax refunds to pay these debts. The most frustrating part is they often send the notice AFTER they've already taken the money. You can call the Treasury Offset Program at 800-304-3107 to find out if your refund was reduced because of an offset and which agency received the money.

Check your "Account" transcript on the IRS website, not just the "Return" transcript. Look for a code 898 which indicates an offset. TC 898 will be followed by another code that tells you what type of offset it was: - TC 898-01: Past due child support - TC 898-02: Non-tax federal debt - TC 898-05: State income tax debt - TC 898-07: Unemployment compensation debt

You might wanna check if someone claimed you as a dependent maybe? My cousin had something similar happen and it turned out her parents had claimed her on their taxes even though she was filing independently. Could be worth asking family members?

Wow, that's a perfect example of how these small debts can spiral out of control! A $75 parking ticket growing to over $4,000 is absolutely insane but unfortunately very common with municipal collections. For anyone else reading this thread, this is why it's so important to address any tickets, fines, or government notices immediately - even if they seem small. Once they go to collections, the fees and interest can multiply the original debt by 10x or more. Omar, you might want to contact the original issuing agency (probably your city or county) to see if they have any hardship programs or payment plans. Sometimes they'll reduce the collection fees if you can pay the original amount plus reasonable costs. It's worth a shot since $4,000 for a parking ticket is pretty excessive. Also, make sure to get documentation of the payment once you resolve this so it doesn't happen again next year!