12 Del. Admin. Code § 5.0

Current through Register Vol. 28, No. 5, November 1, 2024

Section 5.0 - Offset Procedures

5.1 Upon referral of a debt under this regulation, Revenue will compare tax refund records with records of debts submitted to Revenue.

5.2 For purposes of this regulation, a match for a tax refund owed to a debtor will occur when the taxpayer identifying number and name are the same as the taxpayer identifying number and name of a debtor submitted by the claimant agency.

5.3 Except with respect to a match that relates to a joint or combined income tax return, after a match, Revenue will promptly:

5.3.1 Reduce the amount of any tax refund otherwise payable to a debtor by the amount of the debt or unpaid portion thereof.

5.3.2 Take reasonable steps to notify the taxpayer that the refund has been reduced and the amount of the reduction.

5.3.3 Remit or credit the amount of the offset to the claimant agency. If more than one claimant agency has a debt against the taxpayer, Revenue will remit or credit payments in order of priority as determined by the Director.

5.3.4 Pay to the taxpayer the remainder of any tax refund, if any.

5.4 If a match relates to a joint income tax return, the offset shall be placed on hold pending compliance with the procedures set forth in subsections 5.4.1 through 5.4.3. In such event, Revenue shall:

5.4.1 Take reasonable steps to notify each taxpayer filing such return that a reduction may be made from a tax refund based upon the return. The notice shall include a description of the right of the non-debtor taxpayer to file a written protest with the Director within 30 days of the date of mailing of such notification for the purpose of showing the non-debtor taxpayer's proper share of the refund.

5.4.2 The non-debtor taxpayer may attempt to make the required showing by providing documentation establishing to the Director's satisfaction a right to a portion of the refund based on income reported by the non-debtor taxpayer on the joint return.

5.4.3 If the non-debtor taxpayer timely files a petition and makes the required showing, Revenue shall remit to the non-debtor taxpayer his or her proper share of the tax refund and apply the balance of such refund, if any, in the manner prescribed in subsection 5.3.

5.5 In the event the debtor shall be due a refund in combination with a non-debtor by virtue of having filed separately but combined on one return, the Director shall regard each taxpayer as entitled to separate refunds based upon the taxes due and prior payments of each taxpayer individually. The offset contemplated in this regulation shall not be applicable to a separate refund due to the non-debtor taxpayer. The offset provisions shall apply to a separate refund due to the debtor taxpayer.

5.6 Revenue has made reasonable attempts to notify a taxpayer if Revenue uses the current address information contained in Revenue's records related to a tax return.

5.7 Revenue will advise each claimant agency of the names and addresses of the debtors from whom debts were collected and of the amounts collected from each debtor for that agency. Revenue will not advise as to the source of payment from which such amounts were collected.

5.8 For each debt collected in whole or in part through offset, Revenue may withhold from the amount collected and credit to its own account an amount equal to the reimbursement amount.

12 Del. Admin. Code § 5.0

27 DE Reg. 105 (8/1/2023) (Final)