The LT17 confirms the IRS offset your refund against an outstanding tax balance. Instead of receiving a refund, some or all of it was applied to a debt you owe for another tax period. The LT17 shows the original refund amount, the amount applied, and any remaining refund.
How It Works
The offset is automatic under IRC Section 6402. When the IRS processes a return showing a refund and your account has an outstanding balance in another period, the system applies the refund to the balance before issuing any remaining amount to you.
If the Underlying Balance Is Wrong
The offset itself is mechanical. The IRS isn't making a judgment call. If the balance the refund was applied to is incorrect (you've already paid it, it was from an SFR you didn't agree with, or it was assessed in error), you need to address the underlying balance separately. Correcting the balance will generate a reversal of the offset and release of your refund.
Injured Spouse
If you filed a joint return and the offset was for your spouse's individual debt, file Form 8379 (Injured Spouse Allocation) to recover your share.
If your refund was offset and you want to address the underlying debt, call us at (813) 229-7100.