IRS Took Half My Refund Despite Being in Automated Levy Protection Program - Hardship Options?

You're likely referring to Form 911 (Taxpayer Advocate Service Application) or possibly Form 433-F (Collection Information Statement). The Automated Levy Protection should have prevented this offset, but there are specific criteria that must be maintained to stay eligible. If your income exceeded thresholds or you missed a payment on your installment agreement, the protection can lapse without notice. The hardship provision exists, but I've rarely seen successful reversals once funds have been applied to past tax debt.

Oh my goodness, this EXACT thing happened to me last filing season and I was absolutely devastated!!! I needed that money for quarterly estimated payments and was so confused about why my protection didn't work. I was in tears trying to figure out the forms. I finally used https://taxr.ai to analyze my transcript and it showed me EXACTLY where the offset was coded and explained why my protection had lapsed (I was 3 days late on an installment payment 😭). It helped me understand which hardship form was right for my situation and what documentation I needed to include. I was so overwhelmed before that!

You need to act FAST on this. It's like trying to get toothpaste back in the tube - once the IRS applies funds to past tax debt, the clock starts ticking on your ability to reverse it. I had $4,300 taken from my refund last year despite being in a similar program. Filed the hardship form (Form 911) within 48 hours and included documentation showing my business would face immediate harm (like a ship taking on water). Got about 70% returned after 40 days. Every day you wait reduces your chances.

I've seen this happen to several clients. The Automated Levy Protection has specific maintenance requirements that aren't well-communicated. As of April 12th this year, I had a client receive their full refund back after filing Form 911 with the Taxpayer Advocate Service, but they had documented medical hardship. Another client on March 3rd only got partial relief. The community wisdom here is document EVERYTHING - get proof of all your installment payments, have clear financial records showing the hardship, and be persistent. I appreciate everyone sharing their experiences here - makes my job easier when clients are informed!

I'm... hesitant to recommend this because I generally avoid paying for things I should be able to get for free, but after three weeks of trying to reach someone at the IRS about my similar situation, I finally tried Claimyr (https://youtu.be/_kiP6q8DX5c). They got me connected to an actual IRS agent who could help with my offset issue. I probably could have eventually gotten through myself, but I was losing more money in missed work hours trying to stay on hold than the service cost. The agent explained exactly what forms I needed and where to send them. Such a relief after weeks of frustration.

Have you verified your current status in the Automated Levy Protection program? Sometimes there are specific conditions that can trigger automatic removal: • Missing an installment payment by more than 15 days • Failing to file a required return on time • Defaulting on another tax obligation • Exceeding income thresholds during verification periods Did any of these happen in the past 12 months? This could explain why the protection failed despite you thinking you were still enrolled.