Representative Lauren Boebert is celebrating a win over the "tyrannical" Internal Revenue Services (IRS) after the tax agency announced Colorado taxpayers would not have to pay federal income taxes on their state refunds this season.
"Major victory today as TABOR refunds will not be the next victim of a tyrannical IRS that was seeking to ignore a 30-year-old rule that protects Coloradans from unnecessary taxation," Boebert said in a Tuesday statement.
The IRS had previously said that state refunds issued under TABOR, the Taxpayer's Bill of Rights, could be subject to income tax and had asked Colorado taxpayers to delay their filing their 2024 taxes until a decision was made. The move had infuriated Colorado's entire congressional delegation.
"For the better part of a year, the bipartisan Colorado delegation and I have been fighting to protect Colorado taxpayer TABOR refunds from being seized by the IRS," Boebert said.
Newsweek reached out to the IRS via email for comment.
TABOR, a voter-passed amendment to the state Constitution passed 30 years ago, caps the amount of tax revenue the state is allowed to keep and requires the state to send anything over that threshold back to taxpayers.
That cap, which is determined based on population growth and inflation, has returned record refunds to Coloradans in recent years. In 2022, returns totaled nearly $3 billion, with individual taxpayers receiving $750 and joint filers receiving $1,500. This year, Colorado taxpayers can expect another record refund while they file taxes, receiving $800 each from the state's overflow revenue.
In the last year, Boebert wrote three letters to the IRS pressuring the agency against taxing TABOR refunds.
In a September 5 letter to Commissioner of the Internal Revenue Service Daniel Werfel, Boebert urged the IRS "not to turn away from this well-established precedent" of excluding TABOR refunds to "ensure that Colorado taxpayers are not subjected to further confusion and the potential imposition of an unprecedented tax burden."
The representative also signed onto two bipartisan letters from the state delegation asking that the IRS refrain from taxing state refunds as they reviewed state payments made during the pandemic, noting that "TABOR refunds have long existed prior to the pandemic, and Coloradans should not be penalized as a result."
"A late announcement during tax season will cause Coloradans unnecessary stress as they prepare to file," the 10 Colorado lawmakers wrote in a February 10 letter to then-acting IRS Commissioner Douglas O'Donnell, adding that "Potential new rules promulgated within months of the filing deadline, with the possibility of costing taxpayers a significant amount of money, would impose unnecessary financial distress on countless Coloradans."
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Katherine Fung is a Newsweek reporter based in New York City. Her focus is reporting on U.S. and world politics. ... Read more
