Irs sent me a refund, I thought I owed. What do I do?

Question

I got a letter from the IRS awhile back saying that I owed back taxes from 2005 because all my income was supposedly not reported. I had to respond to their letter and I told them that I would have the money paid by the due date, if I couldn't pay it all I would call them and let them know. I also wrote on the letter for them to take out the money if I get a refund for 2006. They haven't done that, they sent the whole amount of my refund for 2006 instead of taking out what I owed from 2005. I have tried contacting them on the phone and it is hard to get through to them. Someone else called and asked them if you owed money from 2005 would they send your whole refund for 2006 or would they take out what they owe then send you the balance left if any back to you. They told 3 people that they would automatically take out what I owe then send anything left over back to me. I didn't get a big refund for 2006, but I was wondering why didn't they take out like they said they would. Thanks.

Answer 1

If you recently received the notice of the back taxes they may not have accessed the balance due to your account before your return was processed, You need to call the IRS accounts area at 1-800-829-0922 and discuss the balance due with them, they will need to verify your Identity and from there they will access your account to be able to advise you what you need to do.

Answer 2

IRS always send balance due notices to the address on record. So if a person owes and is not receiving your mail from the IRS it is there fault that they have not corrected their address with IRS. 2013 tax return is not due to be until 04/15/2014 at this time IRS is accepting return for current year filing 2012 and prior. Your brother would have to file the return or IRS would have sent him letters that IRS would file for him if he didn't file..... If anyone owes IRS the refund is automatically offset to the IRS debt There is no reason to be afraid to file, if he owes then he needs to pay. But if he has prior years he has not filed IRS is not going to issue a current year refund until he is in full compliance by filing returns from 2006 through 2012....

Answer 3

That is strange that they did not take the money you owed them out of your refund since it states right on their website that they will do that--EVEN WITH A PAYMENT AGREEMENT IN PLACE! Someone must of overlooked that obviously, but what I would still do is honor my word to the IRS and pay them the money you owe them by the due date---and use the refund that they sent you if you have to as well. Then you will be in the clear and there won't be any problem since the refund was valid. There is no point sending the check back to them if you wanted them to apply it towards your 2005 debt anyway.

Answer 4

My guess is that Rob is the most accurate answer so far. If I were you, I would call the IRS and explain what happened. Ask if you can deposit the refund check and send them a check for what you owe from 2005. Normally they would take what you owe out of your refund.

Answer 5

This often happens. Previous year returns are not processed by the same agents.
You will receive a statement for tax due. Unfortunately penalties and interest march on.
Just save the refund for payment.

Answer 6

Speak to your accountant, I am sure they can explain the procedures of the IRS to you. Bank the money and gather some interest on it, it might then pay off a little more of your debt to the IRS.