TOP Frequently Asked Questions

Q: What is the Treasury Offset Program (TOP)?

A: State and federal law authorizes the Michigan Department of Treasury to enter into agreements with the Internal Revenue Service (IRS) and the Department of the Treasury’s Bureau of the Fiscal Service (BFS) to intercept, or offset, federal tax refunds and federal payments for Michigan state income tax debts.

Q: What is the legal authority to take my federal tax refund and apply it to my state debt?

A: Section 6402(e) of the United States Tax Code allows federal tax refunds to be offset to collect delinquent state income tax obligations. 31 U.S.C. § 3720A and other laws authorizes the Michigan Department of Treasury to enter into agreements with the Internal Revenue Service (IRS) and the U.S. Department of Treasury’s Bureau of the Fiscal Service (BFS) to intercept or offset federal tax refunds and federal payments for State of Michigan income tax debts.

Q: What is an offset?

A: An offset is when the Michigan Department of Treasury intercepts your income tax refund and applies the refund to a balance owed to the State of Michigan. If the full amount owed is not collected in one year, the Michigan Department of Treasury may offset future federal payments to satisfy your state tax debt.

Q: How can I avoid having my federal income tax refund intercepted for payment of my state tax debt?

A: Prior to submitting debts to the U.S. Department of the Treasury’s Bureau of the Fiscal Service (BFS) for inclusion in TOP, the Michigan Department of Treasury is required to notify each debtor that it intends to refer the debt for federal offset. If you received this notice, you have 60 days to do one of the following:

• Pay your debt in full. A payment coupon is attached to the bottom of each notice for your convenience or you can go to michigan.gov/collectionseservice to make a payment.
• Provide proof of payment. If you believe that all, or part of this debt has already been paid, send documentation to support your claim to PO BOX 30168 Lansing MI, 48909.

Q: How will I know if my federal tax refund or payment was intercepted to pay a state debt?

A: The U.S. Department of the Treasury’s Bureau of the Fiscal Service (BFS) will notify you in writing that an offset has occurred. BFS will provide information regarding the amount and date of the offset, the state to which the offset was paid, and a phone number to call where individuals may address your concerns and questions regarding the debt associated with the offset.

Q: Will the Michigan Department of Treasury notify the U.S. Department of the Treasury’s Bureau of the Fiscal Service (BFS) of any changes to my balance for payments I make to the Michigan Department of Treasury?

A: Yes. The Michigan Department of Treasury will send updated account information to BFS each week.

Q: I have a payment plan in effect with the Michigan Department of Treasury. Will my federal refund still be offset?

A: Yes. The Michigan Department of Treasury will continue to offset federal income tax refunds even though you are meeting your payment arrangements. Michigan statute allows for the offset of an Income Tax refund until the account is paid in full even if you are on an approved Installment Agreement. The Installment Agreement form also states that any refunds (Income Tax refunds, Lottery winnings, vendor payments) due to you from the State of Michigan will be applied as a an additional payment toward your debt. Your regular monthly payment must still be made to avoid defaulting on your Installment Agreement which could lead to enforcement action.

Q: Will the Michigan Department of Treasury charge me any fees if my federal refund is offset to my state income tax debt?

A: No. The Michigan Department of Treasury does not charge a fee. However, the U.S. Department of the Treasury’s Bureau of the Fiscal Service (BFS) charges a fee (up to $25) to offset federal tax refunds to pay tax debts. BFS will deduct that fee before sending the funds to the Michigan Department of Treasury.

Q: How soon will the federal refund that was offset show on my account?

A: It may take several weeks for the funds offset from your Federal tax refund to be applied to your State of Michigan debt.

Q: My spouse and I filed a joint tax return and our refund was offset for a debt that only my spouse owes. How can I get my portion of the refund back?

A: Complete IRS Form 8379, Injured Spouse Allocation, and send it to the Internal Revenue Service (IRS) to get your share of the refund. You can download the form at http://www.irs.gov/pub/irs-pdf/f8379.pdf. You can also call the IRS at 800.829.3676, or visit a local IRS office.

Q: I paid the Michigan Department of Treasury in full, but my federal refund was still offset. What should I do?

A: The Michigan Department of Treasury cannot stop an offset once you are notified by the U.S. Department of the Treasury’s Bureau of the Fiscal Service (BFS). We will refund any overpayment to you once it has been posted to your account.

Q: Whom should I contact regarding the offset?

A: If you have questions about the Treasury Offset Program (TOP) or the notice you received from the U.S. Department of the Treasury’s Bureau of the Fiscal Service (BFS), contact the U.S. Treasury Offset Program (TOPS) Call Center at 1-800-304-3107.  Many state and federal agencies offset debts through TOP.  The notice you receive from BFS will outline the name of the state agency (or agencies) that requested the offset of your federal income tax refund, along with contact information for those agencies. 

Note: For questions about a debt that you owe to the Michigan Department of Treasury, contact 517-636-5265.