IRS Refund Hold Attorney: Help for Frozen or Seized Refunds

Is the IRS holding your tax refund? This may happen when you’re dealing with tax problems, an audit, or enforcement issues. Sometimes the IRS may be dealing with a routine processing delay, but often it’s because of a more serious problem you need to address as soon as possible.

We can help. At Wiggam Law, our tax experts offer national representation for individuals and business owners, helping you target the underlying issue of a refund hold. Contact us today to start the process of getting your refund.

Refund Problems We Help With

You’re in the right place if you’re dealing with one of these tax problems, leading to a held refund:

• Your refund is under review, audit, or examination by the IRS.
• Your refund was offset against back taxes, penalties, or other federal or state debts.
• You received IRS notices about discrepancies, credits, or income verification.
• You have unfiled returns or prior-year balances.
• Your business has compliance issues that led to a frozen refund.
• Your IRS refund is held due to identity verification, and you suspect identity theft or fraud may be at play.

Our IRS refund hold attorneys handle these common refund issues. We'll help you understand what's happening and the best way to resolve it. 

When Refund Holds Signal Bigger Problems That Require Help

The IRS may seize or freeze your refund for several reasons that have to do with underlying tax issues, and our attorneys can help with all of them:

• Audit: The IRS will hold onto your tax refund if it’s conducting an audit.
• Tax return review: Your return may be under review for suspected issues, such as discrepancies with income documents received by the IRS or issues with tax credits.
• Tax debt from the prior year: The IRS may take your refund to cover unpaid taxes, including payroll tax liabilities for businesses.
• Identity verification: The IRS may need to verify your identity if a suspicious filing was flagged.
• Unfiled tax returns: Unfiled or missing tax returns can result in refunds being held.
• Civil penalties: You may not receive your refund if you’re dealing with civil penalties or investigations, like potential personal liability for a Trust Fund Recovery Penalty.
• Offsets: The government may seize a refund to offset other forms of debt, including federal debt, state income tax debt, state unemployment debt, or unpaid child or spousal support.

If the IRS is holding your refund or planning to seize it, and it’s an indicator of a larger tax issue, Wiggam Law will help you get to the bottom of it.

How Refund Problems Escalate: Why You Need to Take Action

If you use the IRS’s Where’s My Refund Tool to track your refund, you may see Tax Topic 151 and IRS Code 1242. This indicates that the IRS is holding your refund while they review your information, but you may also see other codes. 

The IRS will typically send a notice explaining what's happening, and if you ignore it, the situation can escalate as follows:

• The IRS adjusts your return – If you don't respond, you'll face an incorrect tax liability.
• The IRS denies a credit on your return – If this was done in error, you can appeal, but if you don't, you'll lose some or all of the refund and potentially get banned from claiming that credit for two to ten years.
• The IRS requests information – Failure to respond means they'll move forward without you, leading to a risk of unwanted assessments, loss of credits, and penalties.
• The IRS believes someone else filed your return – Criminals steal taxpayers' identities, file false returns, and get the refunds sent to their accounts. The IRS tries to prevent this issue, but if you really did file that return and you don't respond to the notice, you risk losing the refund. 
• The IRS sends out Notice CP63 – If you receive this notice about a refund hold due to unfiled returns, you need to respond or file. If you don't, the hold will last indefinitely. 

To protect yourself, you need to reach out for legal help when there's a serious issue at stake.

Resolution Paths We Will Explore

Remember that you have options when it comes to tax resolution. Our attorneys will advise you on these methods, helping you move forward on the right path:

• Audit defense
• Verifying reported credits or income
• Tax return discrepancy corrections
• Installment agreement applications
• Offer in compromise requests
• Penalty abatement requests
• Innocent spouse relief requests
• Business compliance (payroll filings, filing back returns)
• Identity theft resolution

Whatever the reason your refund is being held, we’ll address the cause and help set you up for future success with your taxes.

Should I Hire a Tax Attorney?

Hiring a tax attorney for refund problems isn’t always necessary. If it’s a simple problem, such as the IRS proposing a correction that you agree with, you can usually handle the process on your own. Similarly, if you're not facing an audit and you don't owe any tax debt, you typically don't need representation.

However, these more serious situations may warrant hiring a tax attorney:

• Your tax refund is large, and you’re at risk of losing it
• The IRS has opened or expanded an audit
• You have prior-year tax debt
• You operate a business with payroll tax debt
• The IRS is proposing adjustments that you believe are wrong
• Multiple years are involved in your unfiled returns or back taxes
• The situation is escalating beyond a simple review

Don’t hesitate to contact an attorney at Wiggam Law to get help with these more complex situations. You don’t want your refund to be at risk of being seized.

Why Choose Wiggam Law?

If you’ve decided to work with a tax attorney for your IRS refund issue, we’re here to guide you through every step of the process. Our firm provides these benefits:

• Expert IRS representation
• National practice 
• In-depth experience with IRS audits, collections actions, and complex tax disputes
• Direct communication with the IRS on your behalf
• Honest case assessments, including when representation may not be necessary
• A personalized process that will be the most strategic and successful for each client
• Confidential case review

Our tax refund hold attorney will help you whether your IRS refund was held for back taxes or seized for penalties. We know tax law and will represent you so you don’t have to deal with the IRS directly. 

Frequently Asked Questions About Tax Refunds

Why Is the IRS Holding My Tax Refund?

Your refund may be frozen or seized by the IRS if you have an underlying tax issue, like unpaid taxes from last year, unfiled tax returns, discrepancies in reporting on your tax return, or other types of federal debt. 

Can the IRS Seize My Refund to Cover My Tax Debt?

Yes, the IRS can take your refunds to pay for your tax debt from prior years. The agency may do this until the debt is paid off or resolved. 

How Long Can the IRS Legally Hold My Refund?

The IRS doesn’t have a limit on how long it can hold a refund, but depending on the reason for the hold, it may release the refund after a significant period of time passes if the hold is not addressed. Generally, after 45 days, the agency has to pay interest on any refund. Your refund will usually be held until the issue is resolved, such as an audit ending, or the IRS may decide to seize the refund after tax return review.

What If I Ignore IRS Notices About My Refund?

If the IRS is notifying you that it is holding your refund to cover tax debts or other government debts, your refund will likely be lost if you ignore the notice. The IRS will go ahead and apply the refund to those debts. You may risk more serious IRS actions, like property seizure, if you do nothing when you receive IRS notices.

Is Identity Verification the Same as a Tax Audit?

No. An audit is when the IRS reviews your financial records to ensure your tax return was reported correctly. Identity verification is how the IRS confirms your identity and that you filed a legitimate tax return, preventing tax refund fraud.