- The purpose of debt indicators is to summarize the types of debts owed by taxpayers. Debt indicators alert the IRS that there is a debt owed so that IRS employees can advise taxpayers of the type of debt owed when they receive calls from filers about the status of their refund. In the past, the debt indicator allowed tax preparation firms to obtain debt indicators for taxpayers so that they could approve or disapprove them for a refund anticipation loan (RAL). With RALs, taxpayers receive a loan in anticipation of their refund and most RAL providers use the debt indicators as criteria of approval for the RAL loan. However, in August of 2010 the IRS released a press release advising that they would no longer provide debt indicators to tax preparers.
- According to the IRS, there are three debt indicators which categorize the type of debt owed by a taxpayer. The debt indicator (I) indicates a debt owed by the taxpayer to the IRS, (F) indicates a debt owed to FMS (FMS could indicate a non-tax debt or a state debt) and (B) indicates that a taxpayer owes a debt to both the IRS and FMS. An indicator of (N) means that there is no debt on the account.
- Although an IRS representative can advise you of whether or not there is a debt indicator on your account, he or she can only advise you of the amount if the debt is an IRS debt. If it is a non-tax debt, however, you will need to call FMS at 800-304-3107 or wait to receive your notice from FMS which will contain the offset amount as well as the requesting agency. If you are aware of the agency with which you have the debt, then you should contact it directly.
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