Boebert, Neguse sign onto letter asking IRS not to tax TABOR refunds

U.S. Reps. Joe Neguse and Lauren Boebert, who represent Colorado’s Western Slope, signed onto a letter on Monday from most of Colorado’s congressional delegation asking the Internal Revenue Service not to tax the refunds Coloradans get under the Taxpayer’s Bill of Rights.  

The letter came after the IRS issued a new policy proposal in August that could impact the refunds.  

Neguse, a Democrat who represents the 2nd Congressional District, and Boebert, a Republican who represents the 3rd, were joined by most of Colorado’s congressional delegation, including Sens. Michael Bennet and John Hickenlooper and Reps. Diana DeGette, Jason Crow, Yadira Caraveo, Brittany Pettersen, and Doug Lamborn. 

The senators and representatives argued that because the payments are refunds, they shouldn’t be included in an individual’s federal gross income and, therefore, shouldn’t be taxable.  

“It would appear that the proposed guidance was only issued following an increase in state payments during the COVID-19 pandemic,” they wrote. “TABOR refunds have long existed prior to the pandemic, and Coloradans shouldn’t be penalized as a result.”  

Refunds under the Taxpayer Bills of Rights have never been considered taxable.  

Boebert, in a release issued on Tuesday, said Coloradans should not be burdened with new taxes after enjoying 30 years of non-taxation for TABOR refunds.

“Seeking to impose new taxes on refunds after more than three decades is reckless and greedy,” she said. “TABOR refunds should never be treated as part of an individual’s federal gross income and, as a result, should not be subject to taxation.”

She also, in September, issued her own letter to Daniel Werfel, commissioner of the Internal Revenue Service, offering to meet with him to discuss TABOR.

“It is of utmost importance that we work together to eliminate the current uncertainty surrounding this issue,” she wrote. “By doing so, we can ensure that Colorado taxpayers are not subjected to further confusion and the potential imposition of an unprecedented tax burden.”

Colorado’s Taxpayer Bill of Rights sets a cap on government spending and requires that the state issue refund checks anytime it brings in revenue above that cap. Colorado approved the constitutional amendment in 1992.  

The IRS already suggested once this year it may tax TABOR refunds, but Colorado’s congressional delegation swatted that effort away with another letter.  

The state has issued TABOR refunds in 1997, 1998, 1999, 2000, 2001, 2005, 2015, 2021, and 2022, according to the letter. The state is expected to issue refunds this year as well.