I worked for child support in TX for 7 years...while I don't know you're states child support procedures, I suspect that if you call on Monday morning you will be able to clear it up. It sounds to me like a way for them to close cases that aren't active anymore (to stay in line with Federal guidelines) but I have a very strong feeling that if you call there is a way to stop your case being closed. If you don't get anywhere with the person you initially talk to, then keep moving up the chain of command until you get someone who will listen.
In TX a private attorney can enforce child support, but they have no control over whether the AG keeps their case open. So I don't think hiring a private attorney would help you here. As for the IRS intercepts, those are submitted by the states to the Feds on any obligor that owes more than $500 in arrears. So you would need to have your case open in order to keep getting that money.