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TOP - Treasury Offset Program

    What is TOP?

Treasury Offset Program (TOP) is a centralized offset process that intercepts Federal and State payments (such as income tax returns) of payees who owe delinquent debts. The offset is paid to the Nebraska Department of Labor (NDOL), Unemployment Insurance (UI), to satisfy a debt owed, such as overpaid benefits. If you have overpayments due to fraud or failure to correctly report earnings, your debt will be referred to TOP.
    How does TOP work?

If you owe a debt to the NDOL, we will send your information to Financial Management Services, a bureau of the U.S. Department of the Treasury. Before you receive a Federal income tax refund, the IRS will review the data to see if you owe a debt. If you do, all or a portion of your Federal income tax refund will be held and sent to us to repay all or part of your debt. This process is called “offset.” When the payment is taken, you will receive a letter from Financial Management Services that will tell you how much of your income tax was sent to us to repay your unemployment debt.
    How can I avoid an offset?

To avoid an offset, you must pay the debt in full. The amount is listed on the Important Notice Regarding your Delinquent Unemployment Insurance Debt letter. Use the bottom portion of the letter and envelope included with the letter to send your payment.
    When did this program begin?

Regulations for the offset of tax refund payments to collect unemployment debts were published on January 28, 2011. The offsetting covers unemployment insurance debts that were acquired as a result of incorrect or fraudulent earnings during the weekly claims process. This offset can occur regardless of how long ago the debt was incurred. TOP is authorized by the Debt Collection Act of 1982 and the Debt Collection Improvement Act of 1996. The Program Integrity Act of 2008 allows for overpayment of unemployment insurance fraud debts to be submitted to TOP. The Code of Federal Regulations, 31 CFR Part 285 allows for offset of unemployment compensation debt regardless of age of the debt.
    Will there be any fees associated with an offset?

Yes, the IRS will collect a $17 administrative fee per transaction. For example: If your debt to UI is $100 and your tax return is $117, you will receive no tax refund. The IRS will take $17 and send the $100 to Nebraska. If your debt submitted by NDOL is $1,000 and your tax return is $500, the IRS will take $17 and send Nebraska the balance ($483).
    What should I do if I have declared bankruptcy?

If you have filed bankruptcy, please contact the Nebraska Department of Labor Unemployment Benefit Payment Control Unit immediately at or by telephone 402-471-2865. You will need your case number and the name of your bankruptcy court.
    What should I do if I don’t think the debt can be collected?

Contact the Nebraska Department of Labor Unemployment Benefit Payment Control Unit via email at or by telephone at 402-471-2865.
    Why do I owe this debt?

Any person who has received any sum of benefits to which he or she is not entitled shall be liable to repay this sum. Debts due to fraud or as a result of failing to report wages while collecting benefits qualify for setoff against Federal Income Tax Refund. If you do not repay this debt, the Department of Labor - Unemployment Division may recover this debt through setoff against your Federal or State Income Tax Refunds.
    How do I request a review of this debt?

You received a Notice of Intent to Intercept Federal (IRS) Income Tax refund. You have 60 days from the date of this letter to send in this form. The Commissioner shall review any evidence presented and determine if the debt is subject to offset. If you do not return this form within 60 days, it will be deemed a waiver of opportunity to request a review.
    How do I appeal the amount due?

When your debt was originally established, you were provided an opportunity to appeal the original determination. The Treasury Offset Program is a collection process and is not appealable under the Nebraska statute.
    What is a past-due legally enforceable debt?

According to 5 CFR 835.602, a past-due legally enforceable debt for referral to the IRS is an unpaid obligation of a debtor who has not filed bankruptcy, and does not have an automatic stay in place.
    What is an earnings-related debt?

If you earn any wages from temporary, permanent, part-time, or self-employment while collecting unemployment insurance, you must report those earnings during the week you earned them, not on the week that you are paid. Other income such as severance pay, sick pay, vacation pay, holiday pay, and commission are earnings that must be reported during the week received.
    What is a fraud debt?

Fraud debt includes debt resulting from intentional misrepresentation of who you are. It also results from intentional misinformation regarding your employment, such as not reporting extra income you earned while collecting unemployment. In addition to reporting accurate information, you must also be actively seeking work (when instructed to do so) and must be physically and mentally able to work.
    How do I exclude my spouse's portion of the income tax return from offset?

You must complete IRS form 8379, Injured Spouse Claim and Allocation. You can download this form online at The completed form 8379 should be mailed to the IRS Center where you sent your original tax return. Your debt will still be eligible for offset during the processing period.


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