Most people around Michigan breathe a sigh of relief after April 15. Tax season can be a stressful time but receiving a refund from the government can be a significant benefit that makes all of the stress worth it.

However, people might start to worry if their refund does not appear in the mail after nearly 20 days.

It is possible for the IRS to seize someone’s tax refund. And there are many reasons that the IRS might do so.

1. The individual has debts to pay off

The primary reason that the IRS usually takes a refund is to pay off someone’s debts, such as:

  • Tax debts: Even if someone is making payments to make up for back federal or state taxes, the IRS can take this year’s refund to help cover that repayment.
  • Student loans: Defaulting on federal student loans gives the IRS reason to seize a refund and pay a portion of the loans and interest.
  • Support payments: Falling behind on child support or spousal support payments is also a significant debt. And since these payments are under court orders, the IRS can use refunds to pay them.

The IRS can also seize a refund to pay debts even if someone has filed bankruptcy. Regardless of whether they filed Chapter 7 or Chapter 13 bankruptcy, their tax refund can be used to pay debts until they receive a full discharge.

2. The IRS is performing an audit

If the IRS suspects tax fraud or even a simple error on someone’s tax return, such as if they selected the wrong filing status, the IRS might hold a refund while they investigate and complete an audit.

3. The IRS has a question about someone’s tax account or history

Similar to an audit, the IRS might freeze a refund if they find an issue with someone’s tax account. These issues can often include:

  • Suspected identity theft
  • Tax filing issues after a divorce
  • Joint filing issues when one spouse has debt

There are various other reasons that the IRS could seize someone’s refund. And those reasons often depend on someone’s specific circumstances. Reviewing their tax return as well as their tax account can help individuals understand why they might not have received their refund this year.