The CP32 means your joint tax refund has been frozen or offset because one spouse owes a debt that the government can collect through refund offset. This could be a prior year federal tax debt, past-due child support, defaulted student loans, or a state tax debt. The entire joint refund was taken, even though one spouse may not owe anything.
Injured Spouse Relief
If you filed a joint return and your refund was offset to pay your spouse's individual debt, you may be an "injured spouse." Under IRC Section 6402, you can file Form 8379 (Injured Spouse Allocation) to recover your portion of the joint refund.
Form 8379 allocates the joint income, deductions, credits, and payments between both spouses. Your share of the refund is calculated as if you had filed separately, and that share is returned to you. The offset remains in place only for the portion attributable to the spouse who owes the debt.
Who Qualifies
You qualify for injured spouse relief if you filed a joint return, the refund was offset to pay your spouse's individual debt (not a joint debt), and you have income or payments (withholding, estimated taxes) that contribute to the joint refund. You must show that part of the refund is attributable to your income and your tax payments.
Community property states have additional rules. In community property states, income may be allocated differently than in non-community property states. If you live in a community property state, the allocation on Form 8379 follows community property law.
How to File
File Form 8379 as early as possible. You can file it with your original return if you know an offset will occur, or you can file it after the fact when you receive the CP32. If filed with the return, processing takes about 11 weeks. If filed separately after the return, processing takes about 8 weeks.
Include your portion of income, withholding, estimated payments, and credits. The IRS calculates what your refund would have been if you filed separately and returns that amount.
If your joint refund was offset, call us at (813) 229-7100. We can help you file Form 8379 and recover your share.