Colorado Notice of Intent to Offset Refund Checklist
A notice from the Colorado Department of Revenue about an intercepted refund means the state has already taken money from your tax refund to pay a debt you owe. This debt might come from unpaid taxes, child support, unemployment insurance overpayments, judicial fines, or other state obligations. The notice arrives after the refund has been intercepted, not before.
Understanding what this notice means and how to respond can help you address the issue and challenge the intercept if you believe it was made in error.
What This Notice Means
The state has identified money you owe to Colorado and has already collected it by withholding your tax refund. Instead of sending you your refund check or deposit, Colorado used that money to pay down or pay off the debt. This collection tool is referred to as a "refund interception" or "refund offset." By the time you receive the notice, the intercept has already occurred, and your refund has been applied to the outstanding debt.
Why the State Sent This Notice
Colorado sends an intercepted refund notice when it has recorded an unpaid debt in its collection system. The debt might be from a previous tax year, a penalty, child support arrears, an unemployment overpayment, judicial fines, restitution, or another state obligation.
The Department of Revenue sends this notice to inform you of the agency that initiated the intercept, the amount taken, and who to contact for further information. The notice serves as documentation of what has already happened to your refund.
What Happens After You Receive This Notice
When you receive the notice, your refund has already been intercepted and applied to your debt. If your refund exceeds the debt, you will receive the difference. If your refund was smaller than the debt, the state took the entire refund, and you still owe the remaining balance.
The agency may pursue other collection actions for any unpaid balance. The notice explains which agency took your refund and provides contact information so you can address questions or disputes.
What This Notice Does Not Mean
This notice does not mean you have time to prevent the intercept; it has already occurred. The notice also does not mean you cannot dispute the debt or request a review of the intercept. It does not mean that legal action has been filed against you or that wage garnishment is about to begin.
The notice pertains explicitly to the refund intercept that has already occurred, not a final judgment or court order.
Checklist: What to Do After Receiving an Intercepted Refund Notice
Step 1: Read the Notice Carefully and Record Key Information
Find and write down the following details from the notice:
● The amount of the refund that was intercepted.
● The type of debt (unpaid taxes, child support, overpayment, judicial debt, etc.).
● The tax year or period to which the debt relates.
● The office or department that initiated the intercept.
● A phone number and mailing address for the agency are provided.
● Any reference or case number on the notice.
Keep the notice in a safe place where you can find it again.
Step 2: Verify That the Debt Belongs to You
Before you respond, confirm that the debt listed is actually yours:
● Is your name spelled correctly on the notice?
● Is your Social Security number correct?
● Is the tax year or period correct?
● Does the type of debt match something you remember owing?
If something looks wrong, note those questions so you can ask about them when you call.
Step 3: Gather Documents About the Debt
Collect any papers you have related to the debt:
● Previous tax returns for the year in question.
● Notices from the state about the original debt.
● Proof of payments you may have already made.
● Any correspondence about a payment plan.
● Receipts or documentation if you think the debt is incorrect.
You may not have all of these, and that is acceptable. Gather what you have.
Step 4: Contact the Agency Listed on the Notice
Call the phone number on the notice during business hours. Have the notice in front of you when you call.
Explain that you received an intercepted refund notice and you want to:
● Confirm the details of the debt.
● Ask about your options for the remaining balance.
● Understand how the intercept was applied.
● Request a review if you believe the intercept was incorrect.
Take notes on what the representative tells you, including their name and the date of the call.
Step 5: Ask About Your Options for Remaining Debt
If you still owe money after the intercept, ask the representative:
● Can you set up a payment plan for the remaining balance?
● What are the monthly payment options?
● When do payments need to start?
● Do you need to submit a formal request?
Different debts have different rules. The representative can inform you about what applies to your specific situation.
Step 6: If You Disagree With the Debt, Ask How to Challenge It
If you believe the debt is incorrect or not yours, ask the representative:
● What is the process to dispute it?
● Do you need to submit this in writing, or can it be done over the phone?
● What is the deadline for requesting review?
● What documents do they need from you?
For judicial offsets specifically, you must request an administrative review in writing within 30 days of your notice from the Department of Revenue. Write down these details and follow through promptly.
Step 7: If You Arranged a Payment Plan, Get Confirmation in Writing
If you arrange a payment plan by phone, ask the representative:
● Will they send you a written confirmation?
● When will you receive it?
● What happens if you miss a payment?
Wait for written confirmation before relying on an agreement made by phone.
Step 8: Document Everything You Do
Keep a record of:
● Every call you make, including the date, time, and name of the person you spoke with.
● Every letter or email you send to the state.
● Every response you receive from the state.
● The dates you took each action.
This creates a paper trail if you need to dispute something later.
Step 9: Follow Up If You Do Not Hear Back
If you submitted a dispute or payment plan request and do not hear back within the timeframe the agency gave you:
● Call to check on the status.
● Ask whether they received your submission.
● Obtain a new timeline for when you can expect to hear a decision.
Do not assume silence means approval or denial. Follow up promptly.
Common Mistakes to Avoid
● Ignoring the notice and hoping the issue will resolve itself. The intercept has already occurred, and you may still owe additional money.
● Missing any deadline stated on the notice. For judicial offsets, you have 30 days to request administrative review.
● Sending a response without keeping a copy for your records. Always keep copies of everything you send to the state.
● Assuming a phone conversation with a state representative means the issue is resolved. Obtain written confirmation before relying on any agreement.
● Neglecting to ask precisely what happens next or when you will hear from the state. Clear timelines prevent confusion and ensure the timely completion of deadlines.
Frequently Asked Questions
Will the state intercept my entire refund, or just part of it?
The state will intercept your refund up to the full amount of the debt you owe. If your refund exceeds the debt, you will receive the difference. If your refund is smaller than the debt, the state will take the entire refund, and you will still owe the remaining balance.
Can I get my refund back once it has been intercepted?
Once the intercept occurs and the money is applied to your debt, the refund cannot be automatically returned. If you believe the intercept was a mistake, you can dispute it by contacting the agency as stated in the notice. The process for disputing depends on the type of debt.
Does an inquiry or an intercept hurt my credit score?
A refund intercept itself does not appear on your credit report. However, if the underlying debt is unpaid taxes or another obligation that gets reported to credit agencies, it may already be on your credit report.
What if I filed a joint return and the debt belongs to my spouse?
If a refund is intercepted to pay a debt owed by one person on a jointly filed return, the non-debtor spouse can make an injured spouse claim to recover their portion of the refund. You must make this claim in writing and include copies of your federal return, all W-2 and 1099 statements, and IRS Form 8379 if filed.
Can my federal refund also be taken for Colorado state debts?
Yes. Through the Treasury Offset Program, the federal government can offset federal tax refunds to collect certain state debts, including state income tax obligations, child support, and certain unemployment compensation debts.
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This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance
