713.23 When the Household Fails to Make Proper Payment (FSM) |
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* See Section 621.05, When the Household Fails to Make Proper Payment.
IRS Tax Refund Offset
OSI may pursue collections by attaching income tax refunds payable to households. The claim must meet all of the following:
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• The amount of the claim must be $25 or more.
• The household must have failed to make a payment on the claim for:
- no longer than 9 years and 11 months, and
- no less a time than 3 months as of Oct. 1 of the year of submittal for offset, or as of an earlier date as established by OSI.
• Pursue an IRS Tax Refund against only one individual to avoid offsetting excessive amounts from tax refunds. More than one individual involved in a claim may be pursued for IRS Tax Refund Offset as long as any separately presented claims are subtracted from the claim against the remaining individual.
• Provide a notice of intended actions and appeal rights to the household.
Exceptions: OSI will not:
• apply the ten year limit if a court has made a final judgment ordering the household to pay the claim.
• consider a claim delinquent
- if the household is within its 30 Days Grace Period to respond to the initial demand letter or
- if a Fair Hearing was requested within the 90 days allowed and remains pending.
• pursue an IRS offset if either of the circumstances below applies to the claim in question:
- a bankruptcy stay is in effect, or
- the claim has been discharged in bankruptcy.
60 Day Notice
OSI will send a 60 Day Notice of IRS Submittal Intent to individuals whose claims meet the Offset criteria prior to the IRS submission cut-off date. The notice is sent to the address provided by the IRS.
Exception: OSI may send an additional notice to an address that they believe is more current than the one provided by the IRS.
• OSI will not pursue an IRS offset if either of the circumstances below applies to the claim in question:
- a bankruptcy stay is in effect, or
- the claim has been discharged in bankruptcy, the individual may need to contact the IRS to protect the refund of spouses who are not liable for the claim,
• instructions on how to pay the claim, including the Name, Address, and Telephone Number of a DHHS contact who can discuss both the claim and the impending Tax Offset, and
• the individual’s right to appeal. All six of the allowing Appeal Rights must be included in the 60-day notice:
- The individual is entitled to appeal the intended referral for offset.
- DHHS will not review appeals it receives later than 60 days after the date of the 60 Day Notice.
- Claims that have been appealed will not be referred for offset while under appeal.
- To appeal, the individual must provide evidence that the claim is not past due or is not legally enforceable.
- An appeal is not considered received until the individual provides such evidence.
- The individual must provide their Social Security number with the appeal.
Appeals
DHHS must consider any evidence submitted timely by the individual to decide whether the claim is past due or legally enforceable. DHHS must notify the individual of its decision in writing.
Notice of Decision
DHHS must prepare a written Notice of Decision (NOD) in response to an appeal. The NOD must include all of the following:
• That DHHS does or does not intend to refer the claim to the IRS for offset.
• That the individual is entitled to appeal the DHHS decision to the U.S. Department of Agriculture, Food and Nutrition Services (FNS).
• That FNS will not review an appeal if it receives the appeal later than 30 days after the date of the DHHS NOD to the individual.
• The address of the FNS Regional Office which includes a line reading "Tax Offset Review".
• A request that the individual include their Social Security Number with the appeal.
See 621.07, Suspending or Terminating Collection, 621.09 , Claims Discharged through Bankruptcy, and 621.11, When a Household Makes an Overpayment on a Claim.