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State of California Franchise Tax Board

Tax News
Interagency Intercept Collection Program

We administer the Interagency Intercept Collection (llC) program on behalf of the State Controller's Office. The IIC program intercepts (offsets) refunds when individuals and business entities owe delinquent debts to government agencies and California colleges.

An interagency intercept occurs when our IIC program receives a request from one of over 400 participating agencies to intercept tax refunds, lottery winnings, or unclaimed property payments from individuals or business entities who owe delinquent amounts. All refunds are subject to interception. However, we only intercept the amount owed and lottery winnings for all agencies except for the IRS.

An interagency intercept may occur against an individual taxpayer when an intercept request is made by a:

  • State agency
  • University
  • City agency
  • County agency
  • Special district
  • Internal Revenue Service

An interagency intercept may occur against a business entity taxpayer when an intercept request is made by:

  • California Employment Development Department
  • California Board of Equalization

If the individual has an intercept request from any of the requestors listed above, we submit the funds up to the amount of the debt to the requesting agency.

Refunds from tax joint returns may be applied to the debts of the taxpayer, spouse, or registered domestic partner. After all tax liabilities are paid, we apply any remaining credit to voluntary contributions the taxpayer may have requested and refund the remainder to the taxpayer.

If we only intercepted part of the taxpayer's refund, the State Controller’s Office will mail a check for the remaining amount. If the taxpayer's debt was previously paid, any overpayment will be refunded by the agency that received the funds. Please allow three to four months of processing time.

The taxpayer must call the agency listed on the intercept notice that we sent. We do not have any detailed information about the taxpayer’s account with the agency.

For more information, go to ftb.ca.gov and search interagency intercept collection.

Back to June 2014 Tax News

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