![handle is hein.journals/ftaxr25 and id is 1 raw text is: FLORIDA TAX REVIEW
Volume 25 2021 Number]
THE ROLE OF OFFSET IN THE COLLECTION
OF FEDERAL TAXES
by
Keith Fogg*
ABSTRACT
The legal principle of offset has played a key role in debt collection by
private parties for centuries. In 2021, offset continues to play an equally
essential role in the United States government's collection of debts
owed to it, accounting for billions of dollars in funds taken from outgo-
ing payments. The right of offset arises when two parties owe each
other debts. The party asserting offset can subtract what is owed to
them from what they owe, allowing the parties to avoid an unnecessary
transaction. Offset thus makes intuitive sense, simplifying two payment
flows into one. But offset becomes far more complex when one of the
parties is the federal government, which is unlike a traditional private
creditor in important ways.
Offset has perhaps its largest impact in the tax system, where
Congress has legislated that the Internal Revenue Service (the Ser-
vice') has the authority (and sometimes, the mandate) to offset tax
refunds. Refunds are commonly offset when a taxpayer owes prior year
* Keith Fogg directs the Tax Clinic at the Legal Services Center
of Harvard Law School. Prior to coming to Harvard to found and direct the
tax clinic, Clinical Professor Fogg directed the tax clinic at Villanova Law
School for a decade. Before coming to Villanova, he worked for the Office of
Chief Counsel, IRS for three decades. The author expresses thanks to
Michael Waalkes (a recent graduate of Boston University School of Law),
Rachel Radspinner, Grace Heinerikson, Ted Afield, Michelle Drumbl, Ken
Weil, Bryan Camp, Les Book and Marilyn Ames for their helpful comments
on the Article.
1](ViewImageLocal?handle=hein.journals/ftaxr25&div=1&collection=&method=preview&ext=.png&size=3)
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