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  • PART I ADMINISTRATION OF THE GOVERNMENT
  • TITLE IX TAXATION
  • CHAPTER 62D SET-OFF DEBT COLLECTION
  • Section 5 Transfer of funds owed to claimant agency; deposit in escrow account; notice to taxpayer

Section 5. The department, upon receipt of notification from the claimant agency, shall determine whether the debtor is entitled to a refund of at least fifty dollars. If the debtor is entitled to a refund of at least fifty dollars, the department shall transfer to the claimant agency an amount equal to the refund owed or the amount of the debt certified by the claimant agency, whichever is less. When the refund exceeds the debt, the department shall send the excess amount to the debtor. Upon receipt of such funds transferred from the department pursuant to this section, the claimant agency shall deposit and hold such funds in an escrow account until a final determination of the validity of the debt is made.

At the time of the transfer of funds to the claimant agency pursuant to this section, and in addition to the notice and desk review procedure set forth in section four, the department shall notify the taxpayer or taxpayers whose refund is sought to be set-off that such transfer has been made. Such notice shall state the name of the debtor, the basis for the claim to the refund, the amount of the claimed debt, and the intention to set-off the refund against the debt. In addition, such notice shall state that the debtor has the opportunity to contest the validity and amount of the debt sought to be collected through set-off by applying in writing for a hearing before the claimant agency within thirty days of the date of mailing of the notice. The notice shall also include the name and mailing address of the claimant agency to which the application for a hearing shall be sent and shall advise the debtor that failure to apply in writing for a hearing within the thirty day period shall be deemed a waiver of the opportunity to contest the set-off. If the IV-D agency is the claimant agency, the notice shall state that the debtor may contest the validity and amount of the debt sought to be collected through set-off only in accordance with the provisions of section seventeen of chapter one hundred and nineteen A.

In the case of a joint return, the notice shall also state the name of a nondebtor spouse named in the return, if any, against whom no debt is claimed and the fact that a debt is not claimed against such nondebtor spouse. The notice shall advise the nondebtor spouse that he may apply in writing for a hearing before the claimant agency to determine what portion of the refund is attributable to the income of the nondebtor spouse. The notice shall include the name and mailing address of the claimant agency to which the application for a hearing shall be sent and shall advise the nondebtor spouse that the failure to apply in writing for a hearing within the thirty day period shall be deemed a waiver of the opportunity to contest the set-off.