N.Y. Comp. Codes R. & Regs. tit. 18 § 346.9

Current through Register Vol. 46, No. 45, November 2, 2024

Section 346.9 - Tax refund offset process

The SCU shall administer the process established by the State Office of Child Support Enforcement (State OCSE) pursuant to section 111-b of the Social Services Law, for the purpose of satisfying past-due child support obligations through the offset of Federal income tax refunds, New York State income tax refunds and city income/earnings tax refunds due as a result of overpayments made to the Internal Revenue Service (IRS) and/or New York State Department of Taxation and Finance.

(a) Eligible cases. The following cases are eligible for the tax refund offset process if the court order is payable to the SCU and the tax refund offset criteria established by the State OSCE have been met:

(1) Aid to Dependent Children (ADC) and Foster Care (FC) maintenance cases in which court-ordered past-due support is owed to local social services districts and the State.

(2) Non-ADC cases in which court-ordered past-due child support is owed to persons who are receiving child support services under section 111-g of the Social Services Law and section 347.17 of this Title.

(b) Pre-offset notice to respondents. Written notice that a tax refund offset certification of the respondent's liability for past due child support will be submitted to the Federal Office of Child Support Enforcement and to New York State Department of Taxation and Finance shall be given to a respondent no later than 30 days prior to certification to the Federal Office of Child Support Enforcement or to State Department of Taxation and Finance. The notice shall advise the respondent that review of the proposed certification must be requested, in writing, within 30 days of the date of the notice and shall include a list of the available defenses and other information set forth below, and the manner in which a review of the proposed certification based on such defenses may be obtained:

(1) Defenses. Defenses include, but are not limited to:

(i) The person receiving notice of proposed tax refund offset is not the person identified as owing child support.

(ii) A court order of support does not exist or has been vacated by the court.

(iii) The amount claimed by the SCU to be owed is incorrect because a payment which was made was not credited or the balance due was not accurately computed, or the weekly/monthly amount due or arrears balance is incorrect or was changed as a result of a modification of the court order.

(iv) The proposed tax refund offset is the result of a failure to make court-ordered periodic payments toward an arrears amount established by a court order of support made before September 1, 1984, and the respondent was not, at any time after September 1, 1984, delinquent in making such periodic payments.

(v) The proposed tax refund offset is for an arrears amount established by a court order of support made on or after September 1, 1984, which includes a finding that any anticipated tax refunds pursuant to the most recently filed State and Federal tax returns have been considered by the court and taken into account in determining the amount of periodic payments to be made toward the arrears amount, or in determining the amount of the current support order, and expressly provides that such arrears are not to be certified for tax refund offset. A defense under this clause will not preclude tax refund offset for delinquencies in the making of periodic payments toward an arrears amount.

(2) Other information. The written notice to the respondent, or billing statement attached thereto, must also include the following statements:

(i) The SCU records indicate that you are overdue in making scheduled child support payments and/or have an unpaid balance on court-ordered child support arrears collectible through the tax refund offset process.

(ii) The amount of the unpaid child support payments and/or arrearages is collectible through the tax refund offset process.

(iii) Federal and State laws permit the withholding of Federal and State income tax refunds and city income/earnings tax refunds.

(iv) Your name will be certified for the offset of Federal, State or city tax refunds, if the child support arrears are not paid by a stated date.

(v) Your tax refunds cannot be held, if the arrears have been paid or are not owed.

(vi) In order to obtain a review of your case, you must contact the SCU through the name, telephone number and address provided in this notice and comply with any requests for information.

(vii) In the process of review of a proposed certification, you may be represented by an attorney or other person.

(viii) Prior to submitting any written documentation or appearing at any scheduled conference, you or your representative may review SCU payment records relating to the proposed certification and obtain a copy thereof.

(ix) In the process of review of a proposed certification, you may submit written documentation in support of the alleged defense(s), including your written explanation of why offset should not occur and you may request a conference with the SCU to present written and oral evidence supporting the alleged defense(s).

(x) The decision of the SCU will be based solely upon consideration of the SCU records, any written documentation submitted by you and any written and oral evidence presented at the conference which you requested. The written decision of the SCU will be the final administrative determination.

(xi) Upon the making of a final administrative determination that tax refund offset should not occur, wholly or in part, the SCU will adjust the certification. In the event the offset has already occurred, the SCU will repay you for amounts which were improperly offset.

(xii) Upon receipt of the final administrative determination, you may seek judicial review of the determination pursuant to article 78 of the Civil Practice Law and Rules within the time limits provided in law.

(3) In addition, the written notice or billing statement will advise the respondent of:

(i) the identity, business address and telephone number of any employee of the SCU who may be contacted by him/her with respect to review of the proposed certification or with respect to payment of support liability;

(ii) the exact amount of past-due support; and

(iii) the right to petition the appropriate court for a modification, because of a change in circumstances, of the terms of the support order, including amount of support and payment of arrears, and may similarly seek enforcement of visitation rights.

(c) SCU administrative review. When a respondent who has been certified for the tax refund offset process believes that there is a defense(s) against such offset and requests a review by the SCU which made the certification, the SCU shall conduct the review in the following manner:

(1) The SCU shall review its records relating to the respondent to determine whether any evidence exists for the alleged defense(s) or whether any other error was made.

(2) The SCU shall accept and review any written documentation from the respondent which may support the alleged defense(s), including a written explanation by the respondent of why offset should not occur, if the respondent chooses to offer such a written explanation.

(3) If the respondent requests a conference with the SCU, the SCU shall promptly schedule a conference at which the respondent may present written and oral evidence supporting the alleged defense(s).

(4) The SCU shall render a written decision stating express findings of fact, the reason for its decision and the action required by the SCU, if any. Such decision shall be the final administrative determination and shall be based solely upon consideration of the SCU records, and any written and oral evidence presented at the conference.

(5) The SCU shall promptly send a copy of the decision to the respondent with a statement of the respondent's right of review under article 78 of the Civil Practice Law and Rules and of the statute of limitation applicable thereto.

(6) If the written decision of the SCU requires the total or partial deletion of the amount of past-due support certified, the SCU shall immediately initiate such actions as are necessary to accomplish that result. If the tax refund offset has already occurred, the SCU will repay the respondent for amounts which are offset.

(d) Notice to non-ADC clients. In a non-ADC case, prior to disbursing any part of the refund to the custodial parent, the local SCU must inform the non-ADC custodial parent, in advance, if the local district will use any Federal tax refund offset amount to satisfy any unpaid past-due support owed to the social services district and the State.

(e) Distribution of tax refund offsets. Any and all monies received by the department as a result of certifications made to the United States Department of Health and Human Services and/or to the New York State Department of Taxation and Finance pursuant to this Part and section 171-c of the New York Tax Law shall be distributed in accordance with paragraphs (1) and (2) of this subdivision.

(1) Federal tax offsets. Federal tax offsets shall be disbursed as follows:

(i) Single certifications. If a respondent is certified for a single case, the entire amount offset shall be disbursed for the case for which the respondent was certified.

(ii) Multiple certifications. If a respondent is certified for two or more cases, each case will receive a pro rata share of the total amount offset, based on the amount of past-due support owed to that particular case as a percentage of the total past-due liability certified for the particular respondent. In all instances, past-due support owed in ADC and FC cases will be satisfied in full prior to any disbursement to a non-ADC case.

(2) State tax offsets. State tax offsets shall be distributed as follows:

(i) Single certifications. If a respondent is certified for a single case, the entire amount offset shall be disbursed for the case for which the respondent was certified.

(ii) Multiple certifications. If a respondent is certified for two or more cases pursuant to this section, or in combination with Part 345 of this Title, the amount offset shall be prorated among all cases included in the certification. Each pro rata share shall be equal to the amount of past-due support owed to the particular case as a percentage of the total past-due liability certified for the particular respondent.

(3) Transmittal. Disbursements under this section to non-ADC clients shall be accompanied by a transmittal letter explaining whether the amount disbursed is from Federal or State offset, and whether it represents a pro rata share or the total amount offset. In cases involving prorated shares, individual non-ADC recipients of each share are not entitled to know the identity of any other recipient of a prorated share of the total amount offset.

N.Y. Comp. Codes R. & Regs. Tit. 18 § 346.9