Burgess J.W. Raby & William L. Raby have published The IRS’s Ability to Reduce Refunds by Amounts Owed, also available on the Tax Analysts web site as Doc 2005-19313, 2005 TNT 183-8.  Here is the Introduction:

The statute itself is deceptively simple. Section 6402(a) provides that the IRS, "within the applicable period of limitations, may credit the amount of [any] overpayment, including any interest allowed thereon, against any liability in respect of an internal revenue tax on the part of the person who made the overpayment and shall . . . refund any balance to such person."

But note that limiting phrase: "within the applicable period of limitations." And also note that the statute itself says nothing about the "right of offset" that is available to the government in court when the taxpayer sues for a refund. In this article, we will focus on those two phrases, both affecting the outcome of many refund claims filed each year. Note that we will not deal with the rest of section 6402, which mainly allows the IRS to act as a collection agency for such things as past-due support payments, debts owed to federal agencies, and past-due state income tax obligations.