150-305-0350 - Offset of State Debt Through U.S. Treasury Offset Program

150-305-0350. Offset of State Debt Through U.S. Treasury Offset Program

(1) For the purpose of this rule:

(a) A debt is "liquidated" if the debt meets the criteria for liquidated debt under the Oregon Accounting Manual, Chapter 35, the debtor is not currently in bankruptcy, and the department has issued a warrant for the debt.

(b) "Federal payments" do not include payments that are exempt from offset under federal law, including but not limited to social security payments, and veterans' affairs benefit payments to the extent such payments are exempt from offset under federal law.

(2) The department may submit liquidated state debt for offset against federal tax refunds through the "Treasury Offset Program" under 26 USC 6402(e) and 31 CFR 285.8 and federal payments under 31 USC 3716(h) and 31 CFR 285.6.

(3) Notice of intent to offset federal tax refunds. Before submitting an Oregon tax debt to the Debt Management Services, U.S. Treasury for offset against a federal tax refund, the department must send written notice of intent to offset to the taxpayer by certified mail.

(4) Notice of intent to offset federal non-tax payments. Before submitting a liquidated state debt to the Debt Management Services, U.S. Treasury for offset against a federal non-tax payment, the department must send written notice of intent to offset to the debtor by regular mail or certified mail.

(5) Disagreement procedures. If a debtor disagrees with the notice of intent to offset and wants reconsideration of the decision to offset, the debtor must submit a letter of disagreement to the department within 60 days of the date shown on the notice of intent to offset. The debtor must provide, and the department will limit consideration to, evidence that the debt scheduled for offset is not:

(a) Past due; or

(b) Legally enforceable.

(6) If the debtor claims that a tax debt is not legally enforceable because the debtor is an enrolled member of an Indian tribe whose income is not subject to Oregon tax under ORS 316.777 or 316.785, the department will consider the merits of such a claim unless the issue has already been finally adjudicated by a court in a proceeding to which the department is a party.

(7) Review of disagreement. For each letter of disagreement, the department will:

(a) Review all evidence provided by the debtor, and

(b) Remove the debtor's name from the federal offset list for the debt if the department determines that the debt is not past due or is not legally enforceable.

(REV 5-2002(Temp), f. & cert. ef. 9-23-02 thru 3-1-03; REV 8-2002 f. & cert. ef. 12-31-02; REV 7-2105, f. 12-23-15, cert. ef. 1-1-16; Renumbered from 150-305.612, REV 49-2016, f. 8-13-16, cert. ef. 9-1-16)

Publications: Contact the Oregon Department of Revenue to learn how to obtain a copy of the publication referred to or incorporated by reference in this rule pursuant to ORS 183.360(2) and 183.355(1)(b).

Stat. Auth.: ORS 305.100

Stats. Implemented: ORS 305.612

The following state regulations pages link to this page.