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Can the IRS seize an overpayment applied to next year?

Level 1

Client owes prior year federal tax. Current year has a refund which was applied to next year's estimated tax. Can the IRS seize th

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5 Replies 5
Level 15

It's not exactly "seizing" when they are holding their own money in their hands, but why wouldn't they?

Barber! Why didn't I think of this before? Getting paid to give out bad tax advice - need I say more? I've run with scissors for years so it is a natural fit.
Level 13

" Current year has a refund"

Yes, that is what they do with a refund.

Although this year, sometime earlier this month they started paying out the RRC part of it anyway.  Maybe you can credit-elect that much.  

Level 7

That's good to know.  I was wondering how they were going to handle the RRC portion of overpayments since the CARES Act prohibited refund offsets for prior year tax liabilities.


Level 1

I mean can the IRS seize an overpayment applied to next year's estimates and ? The overpayment does not include an Recovery Rebate Credit (RRC)

Thank you

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Level 15

Yes and they most likely will.