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Level 2
March 30, 2021
Question

Can the IRS seize an overpayment applied to next year?

  • March 30, 2021
  • 3 replies
  • 16 views

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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3 replies

IRonMaN
Level 15
March 30, 2021

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

Slava Ukraini!
BobKamman
Level 15
March 30, 2021

" 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 6
March 30, 2021

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.

Thanks!

DWACPAAuthor
Level 2
March 30, 2021

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

sjrcpa
Level 15
March 30, 2021

Yes and they most likely will.

The more I know the more I don’t know.