The IRS requested a letter from my employer asking them to list wages and withholdings, in additional to copies of W-2's and paystubs. They have denied my state refund?

In the United States, the federal government and the several States operate cooperating, but parallel, tax systems. They exchange information, but each collects its own taxes, processes its own tax returns, and issues its own refunds.

Federal and state tax returns are filed separately with the IRS and the state taxing agency.

If you are owed a refund from the IRS, that is processed and sent to you either by direct deposit, if you submitted bank account information, or by check. (For a separate fee, TurboTax can arrange for a debit card to be sent to you and loaded with your refund.)

If you are owed a refund from a state, that is processed separately by that state, and sent to you using the method above. Both processes are independent of each other and funds can reach you on different dates. The IRS cannot deny the issuance of a state tax refund. Only the relevant state can make that decision.

Not sure I am understanding this as the letter came from NY State and they have denied my claim for an income tax refund.  Additionally, given I have sent in the W-2's from my employers, I find it odd that they are requesting a letter from an officer of the company listing wages and withholdings.  To top it off the employer has refused to do this, saying they are unable to.  I have sent in copies of all W-2's, pay stubs and the notice from the employer, hopefully this will suffice.

Ma'am, your question clearly said, "The IRS requested..." The quality of our answer is largely governed by the accuracy of your question. For what it's worth, I think the NY request is strange, too. If the employer will not comply, it is beyond your ability to force them. Your argument is with the State of New York: You have complied with your responsibilities under the law and the state should issue your refund.

...just to be clear...the State of NY tax department is not the "IRS"

.....so it appears the IRS did not ask for that data,...the state of NY Dept of Taxation did

...only use the term "IRS" when referring to the Federal tax agency, not your State.

(Unless both sent you separate letters asking for that data?????)

Yes, my apologies, it was the State of New York that denied the refund.