General Information about the Treasury Offset Program
The Treasury Offset Program (TOP) is a debt collection program administered by Financial Management Services (FMS), a bureau of the U.S. Department of the Treasury. This program allows state agencies to submit past-due, legally enforceable state income tax obligations to FMS for offset of the debtor’s individual federal income tax refund. If a taxpayer has a past-due Connecticut income tax liability, the Connecticut Department of Revenue Services (DRS) will send the taxpayer a Notice of Intent to Offset by certified mail.
How to Avoid an Offset
To avoid the offset, you must take one of the actions described below within 60 days from the date of the certified Notice of Intent to Offset.
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Pay the debt in full:
You must pay the full amount listed on the Notice of Intent to Offset. Use the coupon included with the notice when you send in your payment. -
Request a review
If you believe that all or part of the debt is not past due or not legally enforceable or you believe that your debt has been paid in full, you must send evidence to support your position. Send your evidence within 60 days of the date of the Notice of Intent to Offset to:
Connecticut Department of Revenue Services
Collection & A/R Management
450 Columbus Blvd. Ste. 1
Hartford, CT 06103
Do you have a current payment plan in place with DRS? If so, you should continue to make your payments on schedule. However, even if you have a payment plan, DRS will offset your federal (and state) tax refunds to satisfy any remaining balance.
Bankruptcy
If you have filed for bankruptcy, please contact us immediately. You may call DRS Bankruptcy Unit between 8:30 a.m. and 4:30 p.m. at 860-297-5940 or mail the information to:
Connecticut Department of Revenue Services
Collection Unit - Bankruptcy Team
450 Columbus Blvd. Ste. 1
Hartford, CT 06103
Provide us with your bankruptcy case number and the bankruptcy court. Although you are not subject to offset of your federal income tax refund while the bankruptcy “automatic stay” is in effect, you still are obligated to file tax returns.
Frequently Asked Questions
Q - What is an offset?
A - An offset is when the federal refund you would have received is used to pay all or a portion of a state income tax debt. If the full amount owed is not collected in one year, future offsets may be done to satisfy your tax debt.
Q - Can an offset be avoided?
A - Yes. You must pay the balance of all tax liabilities listed in the notice, including ongoing interest, within the 60-day time frame provided in the Notice of Intent to Offset. If the debt is not resolved within 60 days, DRS will send a request to FMS to offset any federal income tax refund you may be entitled to receive.
Q - Will DRS charge me any fees if my federal refund is offset to my state income tax debt?
A - No.
Q - I paid DRS in full, but my federal refund was still offset. What should I do?
A - At the time DRS sent a request to FMS, your account was not paid in full. Although DRS sends updated information to FMS to reflect a change in the balance due, it is possible that the amount offset will be more than the balance due at the time of the offset. DRS will refund any overpayment to you once it has been posted to your account. If your federal refund was from a jointly filed return, your overpayment will be issued in both names.
Q - My notice says my federal refund will be offset for state income taxes owed for a year in which I did not file a Connecticut income tax return. If I file my return and prove that I do not owe any tax, will you refund the money that was offset from my federal income tax refund?
A - If you file the return and you prove that all the tax due for that year was paid through withholding or estimated payments, the money that was offset from your federal income tax refund will be returned to you. NOTE: You may also be due a refund if the tax withheld or paid through estimated payments exceeds the amount of tax due. However, no refund for overpayment of withholding and/or estimated payments will be issued if the return is filed beyond three years from the due date (or extended due date) of the return.
Mail the return and any documentation of withholding to:
Connecticut Department of Revenue Services
Collection & A/R Management - Enforcement Unit
450 Columbus Blvd. Ste. 1
Hartford, CT 06103
Or fax the information to the Enforcement Unit at 860-541-5843
Q - I have a payment plan in effect with DRS. Will you still offset my federal refund?
A - Yes. DRS will continue to pursue federal offset activity even though you are meeting your payment arrangements as long as there is any unpaid balance. We also will offset any Connecticut state income tax refunds you may receive until the amount is paid in full. Even if you receive a Notice of Intent to Offset from DRS, you should continue to make any scheduled payments until the debt is paid.
Q - Will you notify FMS of any changes to my balance for payments I make to DRS?
A - Yes. DRS will send updated account information to FMS.
Q - How soon will the federal refund that was offset show on my account?
A - Allow a minimum of four weeks for DRS to receive the payment from FMS and for the payment to appear on your account.
Q - I have been notified by FMS that my federal tax refund will be offset so I will not receive my full federal refund. I believe that I have paid off the debt and need to resolve this issue. Who do I contact?
A - You should contact DRS at the address or phone number provided to you on the notice. A department representative can confirm your balance information. DRS will refund any overpayment to you once it has been posted to your account. If your federal refund was from a jointly filed return, your overpayment will be issued in both names.
Q - DRS has served a garnishment for collection action, but my federal refund has already been offset and will pay the debt in full. What should I do?
A - Send a copy of the FMS letter informing you of the federal refund offset immediately to:
Connecticut Department of Revenue Services
Collection & A/R Management - Enforcement Unit
450 Columbus Blvd. Ste. 1
Hartford, CT 06103
Or Fax the information to the Enforcement Unit at 860-541-5843.
Your account will be reviewed and any necessary actions to adjust collection activity will be taken upon receipt of proof of the federal offset.
Q - Can I pay my debt to avoid offset?
A - Yes. Use the coupon included in the Notice of Intent to Offset to send in your payment within 60 days of the date of the Notice of Intent to Offset. You may also pay electronically, by using the Income Tax Payment option on the TSC-IND. If you use the TSC-IND to make the payment, you do not have to mail in the coupon at the bottom of the letter.
Q - My spouse and I filed a joint federal tax return and our refund was offset for a debt that my spouse owes. How can I get my portion of the federal refund back?
A - You must complete IRS Form 8379, Injured Spouse Allocation and send it to the IRS to get your share of the refund. You may download the form from the IRS website at www.irs.gov or call the IRS at 1-800-829-3676. If you have questions about the form or need help completing it, call the IRS at 1-800-829-1040. The completed Form 8379 should be mailed to the IRS center where you sent your original tax return. The IRS will notify DRS when they apportion your refund, and we will adjust your account.
Q - Why can the U.S. government collect money to pay debts owed to a state?
A - Under the federal Debt Collection Improvement Act (DCIA), an administrative offset such as the Treasury Offset Program (TOP) may be used to collect debts, including funds or property owed by a person to a state (including any past-due support being enforced by the state). The Secretary of the Treasury has the discretion to collect debts owed to states by offset; it is not mandatory. A reciprocal agreement must be made with the state and the appropriate state official must request the offset. Connecticut has signed an agreement with the Treasury Department to participate in TOP.
Q - Can I pay my bill online?
A - You can make bill payments or estimated payments after you create your account in the Taxpayer Service Center (TSC-IND). You can also make bill payments or estimated payments without creating an account on the TSC by choosing the appropriate payment option from the list on the left-hand side of the Welcome screen.
