CHAPTER 9.5. SET OFF OF REFUNDS
IC 6-8.1-9.5
Chapter 9.5. Set Off of Refunds
IC 6-8.1-9.5-1
Definitions
Sec. 1. For purposes of this chapter:
"Claimant agency" means any state department, institution,commission, committee, board, division, bureau, authority, officer,official, or clerk of a circuit court.
"Debtor" means any person or legal entity that is delinquent inpaying a debt to a claimant agency that has not been adjudicated,satisfied by court order, set aside by court order, or discharged inbankruptcy.
"Debt" means any liquidated amount owed and due to a TitleIV-D agency of another state, or to any claimant agency which hasaccrued through contract, subrogation, assignment for purposes ofcollection, tort, operation of law, or any other legal theory, regardlessof whether there is an outstanding judgment for that sum.
As added by Acts 1981, P.L.97, SEC.1. Amended by P.L.53-1985,SEC.3; P.L.277-2003, SEC.1.
IC 6-8.1-9.5-2
Debt owed to claimant agency; agency's entitlement to debtor'srefund
Sec. 2. If a debtor owes a claimant agency a certified delinquentdebt that agency is entitled to have the department set off the taxrefund against the delinquent debt.
As added by Acts 1981, P.L.97, SEC.1.
IC 6-8.1-9.5-3
Application by agency
Sec. 3. (a) To obtain a set off by the department, a claimantagency must file an application for the set off with the departmentbefore November 30 of the year preceding the calendar year in whicha tax refund is payable by the department. The department shallprescribe the form of and the contents of the application.
(b) An application filed pursuant to this section is effective onlyfor the purpose of set off of tax refunds that are payable in thecalendar year that succeeds the calendar year in which an applicationis filed.
As added by Acts 1981, P.L.97, SEC.1.
IC 6-8.1-9.5-4
Determination of entitlement to refund; notification of claimantagency
Sec. 4. After the department receives an application for a set offpursuant to section 3 of this chapter, the department shall determinewhether the debtor is entitled to a tax refund. If the departmentdetermines the debtor is entitled to a tax refund, it shall notify theclaimant agency of this fact.As added by Acts 1981, P.L.97, SEC.1.
IC 6-8.1-9.5-5
Notice by claimant agency of intent to have refund set off
Sec. 5. After a claimant agency receives notice that a debtor isentitled to a tax refund from the department, the claimant agencymust within fifteen (15) days of the receipt of the notice of a taxrefund send written notice to the debtor and the department of itsintent to have the tax refund set off. This notice must clearly set forththe basis for the claim to the debt and set off.
As added by Acts 1981, P.L.97, SEC.1.
IC 6-8.1-9.5-6
Contest of agency's claim; notice
Sec. 6. A debtor who receives written notice pursuant to section5 of this chapter is entitled to contest the claimant agency's right tothe debt and set off at a hearing only if the debtor within thirty (30)days of his receipt of notice mails to the claimant agency writtennotice that he intends to contest the claimant agency's right to thedebt.
As added by Acts 1981, P.L.97, SEC.1.
IC 6-8.1-9.5-7
Hearing on contested claim
Sec. 7. If a claimant agency receives written notice that a debtorintends to contest its claim to a debt and set off, the claimant agencyshall hold a hearing under IC 4-21.5-3.
As added by Acts 1981, P.L.97, SEC.1. Amended by P.L.7-1987,SEC.7.
IC 6-8.1-9.5-8
Certification of debt; payment to agency
Sec. 8. After a final determination of the validity of a debt due aclaimant agency pursuant to sections 6 and 7 of this chapter, theclaimant agency shall certify to the department the amount owed bythe debtor to the claimant agency that is subject to set off. Uponreceipt of certification of a debt the department shall set off theappropriate amount and pay it to the appropriate claimant agency.
As added by Acts 1981, P.L.97, SEC.1.
IC 6-8.1-9.5-9
Notice to debtor of action taken; accounting
Sec. 9. If the department sets off a debtor's tax refund pursuant tothis chapter, it shall serve the debtor written notice of the action andan accounting of the action taken on any refund.
As added by Acts 1981, P.L.97, SEC.1.
IC 6-8.1-9.5-10
Collection fee
Sec. 10. The department of revenue may charge the claimant
agency a fee of fifteen percent (15%) of any funds it sets off underthis chapter as a collection fee for its services. The department mustbill the claimant agency in order to collect this fee. However, thedepartment may not assess a fee to a state agency or custodial parentfor seeking a setoff to a state or federal income tax refund for pastdue child support.
As added by Acts 1981, P.L.97, SEC.1. Amended by P.L.53-1985,SEC.4; P.L.103-2007, SEC.4.
IC 6-8.1-9.5-11
Combined returns
Sec. 11. If set off is sought pursuant to the provisions of thischapter against the combined refund of taxpayers who havepreviously filed a combined return, the entire refund is subject to setoff unless there is a timely defense raised by a co-refundee who isnot a debtor as defined in this chapter. If a timely defense is raisedthat the refund is based on a combined application of a debtor and anondebtor, then set off shall only be effected against the debtor'sshare of the refund.
As added by Acts 1981, P.L.97, SEC.1.
IC 6-8.1-9.5-12
Multiple claims; priority
Sec. 12. Priority in multiple claims to refunds allowed to be setoff under this chapter shall be in the order in time which a claimantagency has filed a written notice with the department of its intentionto effect collection through set off under this chapter.
As added by Acts 1981, P.L.97, SEC.1.
IC 6-8.1-9.5-13
Disclosure of information and records; taxpayers; child supportobligations
Sec. 13. (a) Notwithstanding IC 6-8.1-7 or any other provision oflaw prohibiting disclosure of a taxpayer's records or information, allinformation exchanged among the department, the claimant agency,and the debtor necessary to accomplish the purpose of this chapter islawful.
(b) Whenever the child support bureau of the department of childservices seeks to enforce a child support obligation through a setoffagainst a debtor's tax refund, the department shall make the followinginformation available to that agency and to any other state's TitleIV-D agency that is enforcing the child support order against thedebtor:
(1) The debtor's Social Security account number (or numbers,if the debtor has more than one (1) number).
(2) The debtor's home address.
As added by Acts 1981, P.L.97, SEC.1. Amended by P.L.53-1985,SEC.5; P.L.2-1992, SEC.73; P.L.145-2006, SEC.20.