CP 49 - Overpaid Taxes Applied to Other Taxes You Owe

This notice informs the taxpayer that the IRS is taking all or a portion of the overpayment (refund) from one account and applying it to an underpayment (balance due) for another account. There may be additional information on the notice regarding protection from your spouse's debts (Injured Spouse Relief). 

An IRS Notice CP49 is a letter from the IRS informing you that they used all or part of your tax refund to pay a past-due tax debt that you have. The first page of the notice will tell you which year you owed back taxes and the amount that was applied to this debt. Depending on the amount of your refund and back taxes due, you will either receive a check for any remaining refund or notification of a new balance due. Be aware that your federal tax refund may be offset for another debt besides taxes. Sometimes the Treasury Department’s Bureau of Fiscal Services (BFS) will seize a taxpayer’s federal income tax refund and apply it to pay back child support, student loan payments that are in arrears, to repay state unemployment compensation debts, or pay for past-due state income taxes. If it appears your refund was not applied to past-due taxes, it is likely the refund was seized by the BFS for one of the above-listed reasons. 

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