Will my refund be released with IRS collection stop? Awaiting OIC package decision

Unfortunately, while you're in the OIC process, the IRS will typically hold any refunds until your OIC is resolved. This is standard procedure. Collection activities might be paused, but that doesn't mean they'll release funds to you. According to the IRS guidelines, any tax refunds for the year in which your OIC is accepted will be applied to your tax debt. They consider this part of what they call "refund recapture." You should also be aware that if you owe for multiple years, they might apply this refund to those debts regardless of the OIC status. Your best bet is to call the OIC unit directly at 844-805-4980 to check on your specific situation. Sometimes there are exceptions, but generally refunds are held during this process.

I went through this exact situation last year and was so confused by everything. The IRS notices and transcripts were impossible to understand! I ended up using taxr.ai to actually explain what was happening with my account and it showed exactly why my refund was being held and what I could expect with my OIC process. Saved me hours of frustration and google searches trying to piece everything together. The tool explained every code on my transcript in plain English and gave me a timeline of what to expect. https://taxr.ai

After battling with the same problem for weeks, I was about to give up until I found a way to actually talk to a human at the IRS! Used this service called Claimyr (claimyr.com) that got me through to an actual IRS agent in less than 30 minutes when I'd been trying for DAYS on my own. The agent explained that during an OIC process they usually hold refunds, but in my case they were able to release part of it because of my specific situation. Talking to a real person was the only way I got answers. Best money I ever spent to finally get clarity!

I'm an enrolled agent, and I can tell you that during an OIC, the IRS typically applies any refunds to your underlying tax debt. This is part of the standard OIC terms - you agree to forfeit refunds during the OIC process and for the calendar year in which the OIC is accepted. Even with a hold on collections, refund offset is considered separate from collection activities.

They kept my refund when I was in OIC status. it's in the fine print of the OIC agreement - any refunds during the OIC period get applied to your tax debt. Sorry to be the bearer of bad news!

My wife and I just went thru an OIC and our refunds for the past 3 years were all applied to the tax debt. Even with the collection stop. The one thing tho is that when the OIC got accepted, they factored in those applied refunds to the settlement amount, so it actually reduced what we had to pay in the end. So your refund isn't really 'lost' - it's going toward your overall debt.

Have u checked ur transcript??? That will tell u if they're offsetting ur refund. The WMR tool is useless for complicated situations like OICs

i havent been able to get my refunds for 3 YEARS because of my OIC process!!!! the system is rigged!!! 🤬

Check section 7122(c)(2)(B) of the Internal Revenue Code - refunds can be retained while an OIC is pending and for the tax year in which the OIC is accepted. It's standard procedure. Hope that helps!

just got off the phone with the IRS (finally after trying for days and using claimyr.com to get through). They confirmed that with an OIC in process, they'll hold your refund until the OIC is accepted or rejected. If accepted, the refund goes to your tax debt. If rejected, you might get it released unless they apply it to other outstanding tax debts.

Have you tried calling the IRS Taxpayer Advocate Service? They sometimes can help expedite or get special handling for hardship cases.

Check your transcript for code 570 - that means a hold on your account. If you see code 971, that means they sent you a notice explaining whats happening. The combination usually means they're holding your refund for some reason. Pretty common during OIC.