I live in New York State.

My wife has a past tax debt from a failed business. These taxes are owed to the IRS and New York state.

Currently my wife has no income. Each year I file fed form 8379 injured spouse, and state form IT-280 non-obligated spouse. Every year that I have filed this way I have been notified by both Federal and State that the refund is wholly mine.

Here is where the problem starts. The last 2 years (05 and 06) I received my federal refund with no problems, but was notified by NY that even though they (NY state) determined that the state refund was wholly mine it was being offset to the federal debt.

To say it another way, both federal and state would give me my refund, but federal takes the state money.

1)is there a way to prevent this?
2)if yes can I do it retroactively for 05 and 06?

Thanks for any help

1-2) There should be a way to correct this problem. Contact the IRS Problem Resolution and/or Taxpayer Advocate and explain the situation.