Fact check: No, IRS form does not guarantee a refund even for those who owe the IRS

BrieAnna J. Frank, USA TODAY
·4 min read

The claim: Taxpayers who owe the IRS can still file Form 8944 to get refund

A Jan. 30 Facebook post (direct link, archive link) included an image of IRS Form 8944.

“For those of you who owe the IRS did you know that this year you can file a Economic Hardship so that you can receive your taxes!” reads the start of the post. “The form you need to file is 8944 and it needs to be filed before 2/15. Approval could take up to 4-6 weeks.”

The post was shared more than 2,000 times in two days.

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Our rating: False

IRS Form 8944 is for certain tax preparers filing for an exemption from the requirement to electronically submit their clients’ taxes. Experts told USA TODAY various options exist for taxpayers with financial hardship, which include requesting an expedited refund, having their required file date extended or receiving a "currently not collectible" designation.

Form 8944 is for tax preparers, not all taxpayers

When reached by USA TODAY for comment, the social media user acknowledged the post included false information and said it was “made to make a statement.”

Experts confirmed Form 8944 is not meant for use by individual taxpayers seeking financial relief.

The full form, which can be found on the IRS website, includes a section that specifies it is for tax preparers who want to waive the requirement of electronically filing tax returns because of economic hardship.

It might not be the cost of e-filing that creates a hurdle for those preparers but rather the “work involved to do so when also dealing with some sort of economic disruption,” said Garrett Watson, a senior policy analyst at The Tax Foundation.

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The post claims the form will allow taxpayers to claim a refund regardless of debt, but that's not how that situation is handled, experts say.

A taxpayer may see their refund reduced, or offset, by overdue debt they have. That may include past-due federal income tax, other federal debts, state income tax or child and spousal support payments, according to the agency’s Publication 17, a guide for preparing 2022 tax returns.

Whether, or to what extent, their refund is reduced is largely out of the taxpayer's control.

"Generally, the IRS will offset any potential refund a taxpayer may be entitled to by any back taxes owed, including penalties and interest, and there is no sure-fire way to avoid having their refunds offset by the IRS," said Andy Phillips, director of The Tax Institute at H&R Block.

Options for taxpayers with financial hardship

Though Form 8944 can’t help individual taxpayers with financial hardship, other options exist.

If there's a processing delay with their refund, they can request to have their refund expedited even if they owe back taxes to the IRS, according to Mark Steber, chief tax information officer for Jackson Hewitt Tax Services.

Financial hardship may be designated for taxpayers who can't buy medicine, have received an eviction notice and can't pay their mortgage or rent, or have received a shut-off notice and can't pay for utilities, according to the website for the Taxpayer Advocacy Service, an independent organization within the IRS.

The website notes the IRS can only expedite a return that is being held to pay an IRS debt. Qualifying taxpayers who wish to request an expedited refund have to contact the IRS directly.

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Alternatively, taxpayers can file Form 4868, which gives them more time to file their tax return.

“It is worth noting that this extends the filing deadline, but the payment deadline remains and late payment of tax liability will result in interest and penalties,” said Watson, from the Tax Foundation.

Taxpayers may also request "currently not collectible" status, which Phillips said could allow them to get their refund and pay necessary expenses. The designation does not get rid of the debt but pauses the collection until the taxpayer can pay it, as outlined on the IRS website.

The agency may also agree to what it calls an "Offer in Compromise," in which both parties settle on a reduced amount the taxpayer owes.

USA TODAY has previously debunked false claims about tax policies, including that people in public or Section 8 housing can't file taxes as head of household, there are no laws requiring American citizens to pay income taxes, and that the IRS would collect more than $800 million from the winner of a $1.28 billion lottery.

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This article originally appeared on USA TODAY: Fact check: No, IRS form does not guarantee refund for those who owe

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