Tax Offset Question - Can I Check Before Processing Completes?

You don't have to wait for your return to finish processing to check for potential offsets. The Treasury Offset Program (TOP) hotline you called that showed $0 is actually pretty reliable. When I had a student loan offset two years ago, it showed up on that line before my return was even accepted. The unemployment overpayment is interesting though - if your appeal was denied, they might be in the process of submitting it to TOP, but it hasn't hit the system yet. Sometimes there's a delay between when a debt is approved for offset and when it appears in the TOP system.

Based on your situation, here's what you need to know about offsets: • The TOP phone line (800-304-3107) showing $0 is a good initial indicator that no offset is currently in the system • Unemployment overpayments CAN be collected through tax offsets, but they typically need to be delinquent for a certain period • Tax advance loan denials are often based on different criteria than offsets - could be credit score, verification issues, or expected refund amount • If an offset is applied, you'll receive a notice AFTER your return processes explaining the amount and agency My suggestion: Keep monitoring both your return status and the TOP line weekly.

I was in almost the exact same situation on March 15th last year. Called the offset number repeatedly and got $0, but my return was taking forever. As of April 2nd, still nothing showed up on the offset line, but I couldn't get through to the IRS to find out what was happening. Finally used Claimyr (https://youtu.be/_kiP6q8DX5c) and got through to an agent in about 25 minutes. Turns out there WAS an offset pending that hadn't hit the TOP system yet. The agent was able to see it in their internal system and tell me exactly how much would be taken. Saved me weeks of anxiety wondering where my money was going.

Something important that others haven't mentioned: unemployment overpayments typically need to be at least 180 days delinquent before they qualify for a tax refund offset. If your appeal was denied recently, it might not be eligible yet for the 2024 tax season. Additionally, they must send you a notice exactly 60 days before submitting your debt to the Treasury Offset Program. Did you receive any notice about potential offset? The tax advance loan denial could be related - they check for factors that might delay your refund, and pending offsets are one of those factors.

Based on Treasury Offset Program regulations and the Debt Collection Improvement Act, your situation presents an interesting case. The Electronic Funds Transfer Act requires notification before intercepting federal payments, which is why you should have received a Pre-Offset Notice if an offset was pending. The fact that the TOP line shows $0 but you were denied for a tax advance loan suggests the lender's internal algorithms detected something the TOP system hasn't registered yet. This is likely because state unemployment agencies utilize the Treasury Offset Program State Reciprocal Program (SRP) which sometimes has a different timeline than federal debts. I'd recommend monitoring both the TOP line and your transcript for code 898, which indicates an offset has been applied. You don't need to wait for full processing to know about potential offsets, but sometimes they don't appear until later in the process.

Last year I had a state tax offset that never showed up on the TOP phone line. Found out when my refund came in $732 short. Called IRS and they said once the return is accepted, it's too late to stop the offset process even if it wasn't showing on the TOP line. The unemployment agency must have submitted it right after I filed. My advice: call your state unemployment office directly and ask if they've submitted your debt for tax offset. They can tell you immediately if it's in process. Don't trust the TOP line alone.