IRS Says I Owe for 2022 - Will This Affect My 2023 Refund?

What you're experiencing is like a financial game of chess where the IRS is making a move with your past debt before you can collect your current refund. The Treasury Offset Program (TOP) is designed exactly for this - it's like having money in your right pocket while owing from your left, and the IRS simply moves funds from one to the other. Have you verified this is legitimate? Sometimes these notices appear out of the blue...

Yes, this will almost certainly affect your current year refund. The IRS issued a directive on January 17, 2024, reinforcing their offset policies for the current tax season. I've seen this happen countless times with clients. If your 2022 assessment is valid, they'll automatically apply your 2023 refund to that debt. The frustrating part is that this happens BEFORE they notify you about the offset, usually 2-3 weeks after they've already processed it. You need to address this immediately if you want any chance of changing the outcome.

This offset situation can be a real head-scratcher... kinda like trying to explain cryptocurrency to your grandma 😅 I'd be concerned about whether this is a legitimate assessment or if there's been some mix-up. If you need answers quickly, you might want to try Claimyr (https://claimyr.com). It helped me get through to an actual IRS agent when I had a similar situation last year. Waiting on hold for hours isn't fun, but they got me connected in about 20 minutes. Might be worth it to find out exactly what's going on with your 2022 tax situation before your 2023 refund gets processed.

Do you know what the 2022 tax debt is for? Was it from an audit or did you know you owed but couldn't pay at the time? I'm wondering because I just got something similar and I'm trying to figure out what to do. Did you check your transcript online to see if it shows the same information as the notice? I'm still learning about all this tax stuff.

I believe your 2023 refund will likely be applied to your 2022 tax debt. This is what's known as a "refund offset" and it happens automatically in the IRS system. You may want to... consider adjusting your expectations about receiving that refund. If the 2022 debt is larger than your expected 2023 refund, you'll receive nothing and still owe the difference. If your refund is larger than the debt, you'll receive the remainder after the offset is applied. I would... suggest checking your IRS account online or requesting a transcript to verify the exact amount you owe for 2022 before counting on any refund money.

I've seen this situation play out many times on r/tax and other forums. The IRS is absolutely going to apply your current refund to past debts - it's built into their processing system. According to the IRS website (https://www.irs.gov/taxtopics/tc203), they'll send you a notice AFTER they've already applied the offset. What's worse is that if you had planned to use that refund to pay other debts or expenses, you'll need to quickly adjust your financial plans. I'd recommend checking out the Taxpayer Advocate Service if you believe the 2022 assessment is incorrect - they can sometimes help in these situations.

I had exactly this situation last year. The IRS applied 100% of my $3,247 refund from 2022 taxes to cover an outstanding balance of $2,891 from 2021. They then sent me a check for the remaining $356 exactly 17 days after processing my return. The entire process took 42 days from filing to receiving the remainder check. The system is actually quite efficient at taking your money to pay your debts, but less efficient at telling you this is happening. You'll likely receive a notice about the offset approximately 2 weeks after they've already processed it.