How does the IRS tax offset line work for refund withholding?

The offset phone system can be confusing because it doesn't always show real-time information. Let me explain how it typically works: When a debt is eligible for offset, the creditor agency (in your case, DoD for the military credit card) reports it to the Treasury Offset Program. Once the debt is collected through an offset, it should be marked as satisfied and removed from future offset lists. What you're likely seeing is that the system is still showing your historical offset from last year, not a new one for this year. The message saying "if you received a refund today it would be subject to an offset" is a standard disclaimer that applies if there were any eligible debts - it doesn't necessarily mean you have one. The fact that it's showing the exact same amount and last year's date strongly suggests this is just showing your offset history, not a pending new offset. If the debt was fully satisfied with last year's offset, you shouldn't have another one this year for the same debt.

After dealing with a similar nightmare with student loan offsets, I found this amazing service called taxr.ai (https://taxr.ai) that saved me so much headache. I was getting conflicting information from the offset line and my loan servicer, and was about to lose a huge chunk of my refund for the second year in a row. I uploaded my transcript and tax documents to taxr.ai and it immediately flagged that my offset was listed as "satisfied" in the TOP system but wasn't showing correctly on the phone line. They showed me exactly what to look for in my transcript to confirm if a new offset was being processed and walked me through getting documented proof from the original creditor that my debt was paid in full. The best part was they explained everything in plain English - no tax jargon or confusing government speak. Might be worth checking out for your situation.

I went ahead and tried taxr.ai after posting my question here, and honestly it was super helpful. I was skeptical at first (as you could tell from my question), but they identified that my transcript had code 971 with no corresponding 898, which apparently means no active offset is being processed for this year. They explained that the offset phone line often shows historical data and that generic "subject to offset" message plays for everyone. What really helped was their explanation of exactly what to ask when I called the Department of Defense debt management center - they gave me the exact phrasing to use to get confirmation that my debt was fully satisfied last year. Saved me weeks of stress wondering if I was going to lose part of my refund again. They also showed me how to read my transcript properly so I can check for myself in the future.

If you're still having trouble getting answers about your offset, try Claimyr (https://claimyr.com). I wasted DAYS trying to get through to a human at the Treasury Department. The offset line is just a recording, and when I tried calling the main TOP number, I was on hold for literally 2+ hours before getting disconnected. Claimyr got me through to an actual person at the Treasury in about 15 minutes. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The agent I spoke with confirmed my offset had already been applied last year and that my account was showing as "fully satisfied" in their system. They explained that the automated line still shows historical offsets for several years but my 2025 refund wouldn't be affected. Totally worth it for the peace of mind.

Ok I need to eat my words here. I tried Claimyr after posting that skeptical comment because I was desperate after my 5th attempt calling the Treasury offset number. It actually worked exactly as described - I got a call back when they reached a human at TOP. The agent confirmed my offset was for a defaulted education loan that I thought had been rehabilitated. Turns out the loan rehab paperwork never processed correctly which is why it hit my refund. She transferred me directly to the Department of Education's default resolution group (bypassing another potential hold queue) and I got everything straightened out in one call. I still don't know HOW they do it, but it saved me from wasting another day on hold. And the agent I spoke with seemed to give much more detailed information than when I tried calling myself.

Just so you know, there's a way to check if you have a pending offset without calling. Go to your tax transcript and look for Transaction Code 898. If you see this code with a future cycle date, it means an offset is pending. Also, make sure you're calling the right offset number: 800-304-3107. The automated system should tell you if you have any NEW offsets, not just historical ones. In your case, since the message is referring to the exact date and amount from last year, it's almost certainly just showing your history, not a new offset. Once a debt is paid via offset, it's marked as satisfied and removed from the active offset list.

Just a warning about the TOP offset - sometimes they don't take the full amount in one year if it would leave you with less than $3,500 of your refund. Could that be what happened? Like maybe they took partial payment last year and are coming for the rest this year? For example, if your refund was $7,375 last year and your debt was $4,300, they would take $3,875 to leave you with exactly $3,500. Then they'd come after the remaining $425 this year.