Skip to content

Refund Seizure for Past Debts: What the “TOP Code” Means on Your Transcript

Understanding How the Treasury Offset Program Can Take Your Refund

Few things are more frustrating than expecting a tax refund—only to find that some or all of it has been taken. If you check your IRS transcript and see certain codes connected to “offsets,” you may have fallen under the Treasury Offset Program (TOP). This is the federal government’s system for redirecting refunds to pay certain debts.

If your transcript shows specific seizure codes like TC 826 or TC 836, this means that your refund—or part of it—was legally taken to cover outstanding obligations.

This guide explains exactly what these codes mean, which debts cause a refund seizure, and what steps you can take if the refund was taken incorrectly.

What Is the Treasury Offset Program (TOP)?

TOP is administered by the U.S. Department of Treasury’s Bureau of the Fiscal Service. It allows government agencies to intercept your federal tax refund to repay debts you owe to:

  • Federal agencies
  • State governments
  • Courts
  • Child support authorities

The IRS does not decide whether your refund is seized.
It simply executes the offset as required by law.

Which Transcript Codes Indicate a Refund Offset?

If your refund was taken, you may see one or more of these codes:

TC 826 — Refund Applied to Non-IRS Debt

This is the most common TOP code.

Meaning: Your refund was seized and applied to a debt outside the IRS.

Examples of debt types:

  • Child support arrears
  • Delinquent student loans
  • State taxes
  • State unemployment benefit overpayments
  • Court fines or restitution
  • Federal agency debts

TC 826 means the refund was redirected to another agency.

TC 836 — Refund Offset for Child Support

This code is typically linked specifically to:

  • Past-due child support
  • Child support enforcement actions

TC 836 indicates:

Your refund was seized under federal child support enforcement rules.

This usually results in a full or partial reduction of the refund.

TC 898 — TOP Offset

This code directly references the Treasury Offset Program.

It confirms that:

  • An offset was legally mandated
  • Your refund was eligible for TOP seizure
  • The IRS executed the order

Consider TC 898 the official “refund taken” acknowledgment.

Which Debts Can Cause a Refund Seizure?

The most common offset categories are:

1. Past-due Child Support

Offset is mandatory and prioritized.

2. Federal Student Loans

If in default, your refund may be seized.

3. State Income Tax

Unpaid state taxes can trigger a TOP offset.

4. State Unemployment Overpayment

If you received unemployment compensation incorrectly, the state can reclaim funds through your federal refund.

5. Federal Agency Debt

Examples:

  • HUD
  • SBA loans
  • VA benefit overpayments

6. Court-ordered Debts

Federal restitution or fines.

Why the IRS Cannot Reverse a TOP Offset

This is critical:

The IRS does not control the offset decision.

If your refund was taken due to a TOP offset, the IRS cannot:

  • Remove it
  • Cancel it
  • Refund it
  • Negotiate it
  • Appeal it

You must contact the agency that requested the offset.

What to Do If Your Refund Was Seized

Step 1: Identify the Debt

The IRS sends a letter after the offset explaining:

  • Which agency took the refund
  • How much was taken
  • Contact information for that agency

Step 2: Contact the Agency Directly

Examples:

Child support → State child support enforcement
Student loans → Dept. of Education
State tax → State tax authority

The agency—not the IRS—controls the debt and the offset.

Step 3: Request a Hardship Claim (If Applicable)

For debts such as student loans or federal agency debts, you may request hardship review.

Child support-related offsets are generally harder to dispute.

Step 4: Check Whether the Debt Was Mistaken

Offsets have been incorrectly triggered due to:

  • Mixed SSNs
  • Identity theft
  • Debts of someone with a similar name
  • Joint returns where only one spouse owed the debt

In these cases, you may pursue innocent spouse or injured spouse relief.

Married Filing Jointly: The “Injured Spouse” Scenario

If your spouse owed the debt—but you did not—you may qualify for relief.

You must file:

Form 8379 — Injured Spouse Allocation

This may allow the IRS to return your portion of the refund.

Does the IRS Notify You in Advance?

Usually not.

The offset is only revealed:

  • On the transcript
  • In the refund notification letter
  • When the deposit amount is lower than expected

TOP is legally authorized to take the refund without prior notification.

If your refund shows TC 826, TC 836, or TC 898, this confirms a Treasury Offset Program seizure. The IRS did not decide this and cannot reverse it. The only solution is working with the agency that initiated the offset—or filing an Injured Spouse claim in certain cases.

Understanding your transcript helps you know:

  • Which code confirms a seizure
  • Who took the refund
  • Where to direct your complaint
  • How to dispute or appeal the offset
  • Whether you qualify for partial recovery

Tax transcripts don’t just show the loss—they provide the roadmap for getting answers.

If You Found The Information Here Was Useful Please Consider Sharing This Page!
 
 
      
Tags:

Leave a Reply