Why a Refund was Intercepted
If a taxpayer owes a past debt to an agency of the State of Colorado, the income tax refund or PTC Rebate could be intercepted to satisfy the debt. When a refund is intercepted, the Department of Revenue will send a letter explaining which agency initiated the intercept, the amount of the refund intercepted and whom to contact for further information. If the debt is smaller than the refund, the taxpayer will receive the difference. If a taxpayer believes the refund has been intercepted in error, the taxpayer must contact the agency initiating the interception in order to resolve the intercept.
Instances in which a refund could be intercepted include (but are not limited to): debts for child or spousal support; overpaid Aid to the Needy Disabled (AND); due to overpayment of unemployment benefits; unpaid student loans; judicial fines; judicial restitution; unpaid parking tickets; any unpaid interest, fees, or surcharges owed to the Department or any other government agency; or any other unpaid debt to a government agency.
Intercepted Refund Due to a Spouse's Debt
If a refund is requested on a joint return, and the refund was intercepted due to taxes owed or a balance is owed to another Colorado government agency or the IRS, the spouse who does not owe the debt may request that he/she receive the portion of the refund that was intercepted.
Injured spouse claims should be mailed to the department separate from the Colorado income tax return. Claims must include a copy of the federal income tax return or federal form 8379 (available on the IRS Web site) and copies of all W-2, W-2G, or any 1099 statements received by both parties. Send all injured spouse claims to:
Colorado Department of Revenue
Injured Spouse Desk, Room 240
PO BOX 17087
Denver, CO 80217-0087
Innocent Spouse Relief for Income Tax Purposes
When married and filing a joint income tax return, both parties are responsible for any Federal (IRS) or State tax debt. This is true if a divorce decree states that a former spouse will be responsible for any amounts due on previously filed returns. One spouse may be held responsible for all the tax due even if all the income was earned by the other spouse.
If this is the case the taxpayer must first request innocent spouse relief (form 8857) from the IRS. See the IRS Web site for information. If the relief is granted through the IRS then the taxpayer can file for relief through the Department of Revenue. We will mirror the decision the IRS makes.
When requesting innocent spouse relief through the Department of Revenue, a copy of the IRS final determination letter must be attached to the written request. Send all innocent spouse claims to:
Colorado Department of Revenue
Innocent Spouse Desk, Room 240
PO BOX 17087
Denver, CO 80217-0087