Claims by state agencies, municipal courts, district courts, or public housing authorities against state income tax refunds.

  1. Law
  2. Oklahoma Statutes
  3. Revenue and Taxation
  4. Claims by state agencies, municipal courts, district courts, or public housing authorities against state income tax refunds.

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A. For purposes of this section, a "qualified entity" shall mean a:

1. State agency;

2. Municipal court;

3. District court;

4. Public housing authority operating pursuant to Section 1062 of Title 63 of the Oklahoma Statutes;

5. District attorney seeking to collect unpaid court-ordered monetary obligations; or

6. The designee of an entity described in paragraphs 1 through 5 of this subsection.

B. A qualified entity seeking to collect a debt, unpaid municipal or district court fines and costs or final judgment of at least Fifty Dollars ($50.00) from an individual who has filed a state income tax return may file a claim with the Oklahoma Tax Commission requesting that the amount owed to the qualified entity be deducted from any state income tax refund due to that individual. The claim shall be filed electronically in a form prescribed by the Tax Commission and shall contain information necessary to identify the person owing the debt, including the full name and Social Security number of the debtor.

1. Upon receiving a claim from a qualified entity, the Tax Commission shall deduct the claim amount, plus collection expenses as provided in this section, from the tax refund due to the debtor and transfer the amount to the qualified entity. Provided, the Tax Commission need not report available funds of less than Fifty Dollars ($50.00).

2. The qualified entity shall send notice to the debtor by regular mail at the last-known address of the debtor as shown by the records of the Tax Commission when seeking to collect a debt not reduced to final judgment. The qualified entity shall send notice to the judgment debtor or defendant by first-class mail at the last-known address of the judgment debtor or defendant as shown by the records of the Tax Commission when seeking to collect a final judgment or unpaid court fines and costs. The Tax Commission shall provide in an agreed electronic format to the Department of Human Services the amount withheld by the Tax Commission, the home address and the Social Security number of the taxpayer. The notice shall state:

  • a.that a claim has been filed with the Tax Commission for any portion of the tax refund due to the debtor or defendant which would satisfy the debt, unpaid court fines and costs, or final judgment in full or in part,
  • b.the basis for the claim,
  • c.that the Tax Commission has deducted an amount from the refund and remitted it to such qualified entity,
  • d.that the debtor or defendant has the right to contest the claim by sending a written request to the qualified entity for a hearing to protest the claim, and if the debtor or defendant fails to apply for a hearing within sixty (60) days after the date of the mailing of the notice, the debtor or defendant shall be deemed to have waived his or her opportunity to contest the claim. Provided, if the claim was filed by the Department of Human Services, the notice shall state that the debtor must contest the claim by sending a written request to the Department within thirty (30) days after the date of the mailing of the notice, and
  • e.that a collection expense of five percent (5%) of the gross proceeds owed to the qualified entity has been charged to the debtor or defendant and withheld from the refund.

3. If the qualified entity determines that a refund is due to the taxpayer, the qualified entity shall reimburse the amount claimed plus the five-percent collection expense to the taxpayer. The qualified entity may request reimbursement of the two-percent collection expense retained by the Tax Commission. Such request must be made within ninety (90) days of reimbursement to the taxpayer. If timely requested, the Tax Commission shall make such reimbursement to the qualified entity within ninety (90) days of the request.

4. In the case of a joint return, the notice shall state:

  • a.the name of any taxpayer named in the return against whom no debt, no unpaid court fines and costs, or final judgment is claimed,
  • b.the fact that a debt, unpaid court fines and costs, or final judgment is not claimed against the taxpayer,
  • c.the fact that the taxpayer is entitled to receive a refund if it is due regardless of the debt, court fines and costs, or final judgment asserted against the debtor or defendant,
  • d.that in order to obtain the refund due, the taxpayer must apply, in writing, for a hearing with the qualified entity named in the notice within sixty (60) days after the date of the mailing of the notice. Provided, if the claim was filed by the Department of Human Services, the notice shall state that the taxpayer must apply, in writing, for a hearing with the Department within thirty (30) days after the date of the mailing of the notice, and
  • e.if the taxpayer against whom no debt, no unpaid court fines and costs, or final judgment is claimed fails to apply in writing for a hearing within sixty (60) days after the mailing of the notice, the taxpayer shall have waived his or her right to a refund. Provided, if the claim was filed by the Department of Human Services, the notice shall state that if the taxpayer fails to apply in writing for a hearing with the Department within thirty (30) days after the date of the mailing of the notice, the taxpayer shall have waived his or her right to a refund.

C. If the qualified entity asserting the claim receives a written request for a hearing from the debtor or taxpayer against whom no debt, no court fines and costs, or final judgment is claimed, the qualified entity shall grant a hearing according to the provisions of the Administrative Procedures Act. It shall be determined at the hearing whether the claimed sum is correct or whether an adjustment to the claim shall be made. Pending final determination at the hearing of the validity of the debt, unpaid court fines and costs, or final judgment asserted by the qualified entity, no action shall be taken in furtherance of the collection of the debt, unpaid court fines and costs, or final judgment. Appeals from actions taken at the hearing shall be in accordance with the provisions of the Administrative Procedures Act.

D. Upon final determination at a hearing, as provided for in subsection C of this section, of the amount of the debt, unpaid court fines and costs, or final judgment, or upon failure of the debtor or taxpayer against whom no debt, no unpaid court fines and costs, or final judgment is claimed to request such a hearing, the qualified entity shall apply the amount of the claim to the debt owed. Any amounts held by the qualified entity in excess of the final determination of the debt and collection expense shall be refunded by the qualified entity to the taxpayer. However, if the tax refund due is inadequate to pay the collection expense and debt, unpaid court fines and costs, or final judgment, the balance due the qualified entity shall be a continuing debt or final judgment until paid in full.

E. Upon receipt of a claim as provided in subsection A of this section, the Tax Commission shall:

1. Deduct from the refund five percent (5%) of the gross proceeds owed to the qualified entity, and distribute it by retaining two percent (2%) and transferring three percent (3%) to the qualified entity, as an expense of collection. The two percent (2%) retained by the Tax Commission shall be deposited in the Oklahoma Tax Commission Fund;

2. Transfer the amount of the claimed debt, unpaid court fines and costs, or final judgment or so much thereof as is available to the qualified entity;

3. Notify the debtor in writing as to how the refund was applied; and

4. Refund to the debtor any balance remaining after deducting the collection expense and debt, unpaid court fines and costs, or final judgment.

F. The Tax Commission shall deduct from any state tax refund due to a taxpayer the amount of delinquent state tax and penalty and interest thereon, which such taxpayer owes pursuant to any state tax law prior to payment of such refund.

G. The Tax Commission shall have first priority over all other qualified entities when the Tax Commission is collecting a debt, court fines and costs, or final judgment pursuant to the provisions of this section. Subsequent to the Tax Commission priority, a claim filed by the Department of Human Services for the collection of child support and spousal support shall have priority over all other claims filed pursuant to this section. Priority in multiple claims by other qualified entities pursuant to the provisions of this section shall be in the order in time in which the Tax Commission receives the claim from the qualified entities required by the provisions of subsection B of this section.

H. The Tax Commission shall prescribe or approve forms and promulgate rules and regulations for implementing the provisions of this section.

I. The information obtained by a qualified entity from the Tax Commission pursuant to the provisions of this section shall be used only to aid in collection of the debt, unpaid court fines and costs, or final judgment owed to the qualified entity. Disclosure of the information for any other purpose shall constitute a misdemeanor. Any employee of a qualified entity or person convicted of violating this provision shall be subject to a fine not exceeding One Thousand Dollars ($1,000.00) or imprisonment in the county jail for a term not exceeding one (1) year, or both fine and imprisonment and, if still employed by the qualified entity, shall be dismissed from employment.

J. The Tax Commission may employ the procedures provided by this section in order to collect a debt owed to the Internal Revenue Service if the Internal Revenue Service requires such procedure as a condition to providing information to the Commission concerning federal income tax.

K. The provisions of this section shall not apply to claims filed under the provisions of Section 2906 or Section 5011 of this title.

Added by Laws 1983, c. 206, § 1, eff. July 1, 1984. Amended by Laws 1986, c. 269, § 18, operative July 1, 1986; Laws 1989, c. 249, § 6, eff. July 1, 1989; Laws 1992, c. 66, § 4, eff. July 1, 1992; Laws 1994, c. 29, § 1, eff. Sept. 1, 1994; Laws 1996, c. 146, § 1, eff. Nov. 1, 1996; Laws 1997, c. 403, § 20, eff. Nov. 1, 1997; Laws 2003, c. 472, § 3; Laws 2007, c. 135, § 1, eff. July 1, 2007; Laws 2009, c. 258, § 3, emerg. eff. May 22, 2009; Laws 2010, c. 419, § 1, eff. Nov. 1, 2010; Laws 2012, c. 240, § 1, eff. Nov. 1, 2012; Laws 2013, c. 15, § 80, emerg. eff. April 8, 2013; Laws 2013, c. 266, § 1, eff. Nov. 1, 2013; Laws 2015, c. 280, § 1, emerg. eff. May 8, 2015; Laws 2021, c. 353, § 1, eff. Nov. 1, 2021.

NOTE: Laws 1986, c. 218, § 5 repealed by Laws 1989, c. 249, § 49, eff. July 1, 1989. Laws 2012, c. 256, § 1 repealed by Laws 2013, c. 15, § 81, emerg. eff. April 8, 2013. Laws 2013, c. 47, § 1 repealed by Laws 2015, c. 280, § 2, emerg. eff. May 8, 2015.


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