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.
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:
The IRS does not decide whether your refund is seized.
It simply executes the offset as required by law.
If your refund was taken, you may see one or more of these codes:
This is the most common TOP code.
Meaning: Your refund was seized and applied to a debt outside the IRS.
Examples of debt types:
TC 826 means the refund was redirected to another agency.
This code is typically linked specifically to:
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.
This code directly references the Treasury Offset Program.
It confirms that:
Consider TC 898 the official “refund taken” acknowledgment.
The most common offset categories are:
Offset is mandatory and prioritized.
If in default, your refund may be seized.
Unpaid state taxes can trigger a TOP offset.
If you received unemployment compensation incorrectly, the state can reclaim funds through your federal refund.
Examples:
Federal restitution or fines.
This is critical:
The IRS does not control the offset decision.
If your refund was taken due to a TOP offset, the IRS cannot:
You must contact the agency that requested the offset.
The IRS sends a letter after the offset explaining:
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.
For debts such as student loans or federal agency debts, you may request hardship review.
Child support-related offsets are generally harder to dispute.
Offsets have been incorrectly triggered due to:
In these cases, you may pursue innocent spouse or injured spouse relief.
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.
Usually not.
The offset is only revealed:
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:
Tax transcripts don’t just show the loss—they provide the roadmap for getting answers.
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