Chapter 05. Tax Refund Intercept Program — Delinquent Debts
Regulation .01 Definitions.LinkCopy Citation
A.
“Central Collection Unit” means the Central Collection Unit of the Department of Budget and Management.
B.
“Certify” means to furnish to the Comptroller the names, with other identification including address, Social Security or federal tax identification number, and amount of debt of debtors owing money to the State.
C.
“Comptroller” means the Comptroller of the Treasury.
D.
“Debt” means any liquidated sum due and owing any State agency which has accrued through contract, subrogation, tort, operation of law, or other cause of action, regardless of whether there is an outstanding judgment for that sum.
E.
“Intercept” means the action of the Comptroller of withholding all or part of a tax refund due a taxpayer and remitting it to the Central Collection Unit.
F.
“Debtor” means any individual, fiduciary, or business entity which may be entitled to receive a Maryland income tax refund and which owes money to, or has a delinquent account with, any State agency which has not been adjudged satisfied by court order, set aside by court order, or discharged in bankruptcy. “Debtor” and “taxpayer” are synonymous, when a match of names has been made by the Comptroller.
G.
“Refund” means any taxpayer's Maryland income tax refund.
H.
“Review officer” means a staff person designated by the Central Collection Unit to conduct hearings and to render decisions as described in this chapter.
I.
“State agency” means any agency, association, board, bureau, college, commission, committee, council, foundation, fund, department, institute, institution, public corporation, service, trust, university, or other unit of State government, including any subunit of these agencies.
Regulation .02 Duties of the Central Collection Unit.LinkCopy Citation
A.
The Central Collection Unit may certify to the Comptroller the name of any debtor:
(1)
Against whom it has obtained a judgment in any court; or
(2)
Whose account has been referred to the Central Collection Unit in accordance with COMAR 17.01.01 by an educational institution to which the debtor owes a debt for unpaid tuition, fees, or education loans.
B.
The Central Collection Unit may not certify any account with a balance of $25 or less.
C.
The certification shall be made on or before the first day of November for the tax refund payable the following year. Each certification shall provide the name, address, Social Security or federal identification number, and any known aliases of the debtor certified. It shall also provide the Central Collection Unit sequence number and the total amount of the debt.
D.
At least 30 calendar days before certification of a debt, the Central Collection Unit shall send the debtor written notice of the intention to certify the debt. This notice shall also advise the debtor of:
(1)
The amount of the debt;
(2)
The basis for the debt;
(3)
The debtor's right to request an investigation of the validity of the debt;
(4)
His right to contest any adverse determination in a hearing before the Central Collection Unit; and
(5)
His right to judicial appeal in accordance with the Administrative Procedure Act.
Regulation .03 Duties of the Comptroller.LinkCopy Citation
A.
As frequently as practical, the Comptroller shall compare the names of the debtors certified by the Central Collection Unit with the names of taxpayers who file tax returns and are entitled to a tax refund.
B.
If a match is made between a taxpayer eligible for tax refund and a certified debtor, the Comptroller shall pay the refund to the Central Collection Unit, but only to the extent of the amount of the debt certified. Any refund in excess of a certified debt shall be paid by the Comptroller to the debtor.
C.
If a match occurs with one of the parties to a joint tax return, the Comptroller shall withhold only the portion of the refund attributable to the debtor.
D.
The Comptroller shall remit to the Central Collection Unit payments withheld pursuant to this chapter. The Comptroller shall also provide the Central Collection Unit with a list identifying the debtors for whom remittance is made and the debtors for whom the Comptroller has determined that no intercept can be made. The list shall include each debtor's name, address, Social Security number or federal tax identification number, and the Central Collection Unit account number.
E.
The Comptroller shall notify a debtor for whom an intercept is made of the amount paid to the Central Collection Unit and of his right to request an investigation by the Central Collection Unit of the validity of the debt and to request an administrative hearing subject to judicial review in accordance with the Administrative Procedure Act.
F.
The Comptroller shall delete a certified name or change names certified when instructed to do so by the Central Collection Unit.
Regulation .04 Investigation.LinkCopy Citation
A.
Within 15 days of the notice of the Central Collection Unit's intention to certify his name or of the Comptroller's having intercepted his refund, a debtor has the right to request an investigation by the Central Collection Unit if the debtor disputes the validity or the amount of the debt.
B.
The Central Collection Unit shall submit to the debtor a report of its findings within 15 days from the date that the request for investigation was received. The report shall include a notice of the right to request a hearing on the findings and the method of doing so in accordance with the Administrative Procedure Act.
C.
If the investigation results in the reduction or elimination of the debt, the Central Collection Unit shall take corrective action as necessary, by correcting the certification, discontinuing the certification procedures, or remitting to the debtor any intercepted amounts in excess of the debt. Corrective action shall be taken within 30 days of the date on which the Central Collection Unit completes a report of its findings.
Regulation .05 Administrative Hearing.LinkCopy Citation
A.
A debtor may contest the findings of the investigation as to the validity and the amount of the debt in a hearing before the Central Collection Unit. Any request for a hearing shall be submitted in writing to the Central Collection Unit within 30 days of the date of which the investigation report was mailed to the debtor.
B.
In the hearing before the Central Collection Unit, the debtor may not raise any issue regarding the amount of tax refund otherwise due the taxpayer. This restriction does not prejudice any rights available to the debtor under the tax laws.
C.
The Central Collection Unit may deny a request for a hearing if the:
(1)
Appeal is not filed timely and no good cause for the delay is shown;
(2)
Issues raised in the appeal have been adjudicated by a court; or
(3)
Issues raised in an intercept appeal have been adjudicated on an appeal of the certification and no new law or evidence has been introduced.
D.
Conduct of Hearings.
(1)
Within 15 days of receipt of a timely request for a hearing, the debtor shall be notified of the hearing date. The Central Collection Unit shall designate the place for a hearing and shall notify the appellant of it at least 5 days in advance. If the appellant notifies the review officer that either the date or place designated is not convenient and requests a new date or place for the hearing and gives a valid reason for so requesting, the review officer may designate another date and place.
(2)
The debtor may waive an oral hearing date, in which case the hearing shall be conducted by a review of the record. A review of the record shall consist of a review of the relevant collection records and any written evidence submitted by the debtor.
(3)
At any hearing, the debtor has the right to have an attorney or other representative present to assist him.
(4)
The debtor has the right to present witnesses, documentary evidence, and oral argument, and to examine any documents presented by others as evidence at the hearing and to cross-examine any witness.
(5)
The debtor may not raise any issues in the hearing that have been previously litigated, whether in court or in an administrative hearing. The review officer shall make a record, containing the substance of what happened at the hearing, to be retained by the Central Collection Unit. This record, together with all papers filed in the proceedings and the review officer's findings and conclusions, and decisions, constitutes the exclusive record and shall be available for review by the debtor or representative at any reasonable time for a period of 2 years or until all litigation on the intercept is ended, whichever is greater.
(6)
The State agency which referred the debt to the Central Collection Unit may participate in the hearing.
(7)
A hearing request may be withdrawn by the debtor or representative at any time.
(8)
A hearing request is considered abandoned if the debtor and his representative fail to appear at the hearing and fail to notify the Central Collection Unit within 5 days of the original hearing date of a desire to pursue the appeal.
E.
Decisions.
(1)
The review officer shall prepare a written summary of findings of fact and conclusions of law based exclusively on the record and shall make a decision upon those findings.
(2)
The date of the hearing is the date for calculating the amount of any debt considered in the decision.
(3)
If, in the case of a hearing on certification, the review officer finds that the debtor is incorrectly certified, the review officer shall instruct the Comptroller to delete the debtor's name from the certification list, or to reduce the amount of certified debt, whichever is appropriate.
(4)
In the case of a hearing on an intercept, if the review officer decides that no debt exists, the Central Collection Unit shall pay the full tax refund to the taxpayer within 5 days of the date of that determination. If the review officer determines that the tax refund remitted to the Central Collection Unit is in excess of the amount of the debt, the Central Collection Unit shall return the excess to the debtor within 30 days of the date of the decision.
F.
Judicial Appeal. A taxpayer may appeal the review officer's decision in accordance with the Administrative Procedure Act.
Chapter annotations
Authority: Tax-General Article, §§2-103 and 13-919, Annotated Code of Maryland
History: Effective date: November 8, 1982 (9:22 Md. R. 2198) (jointly promulgated with the Department of Budget and Management — see COMAR 17.01.02)
History: Chapter recodified from COMAR 03.04.03 to COMAR 03.04.05 effective October 3, 1988 (15:20 Md. R. 2333)
History: Regulation .01A amended effective October 9, 2006 (33:20 Md. R. 1612)
History: Regulation .01B, G amended effective March 21, 2011 (38:6 Md. R. 393)
History: Regulation .02C amended effective March 21, 2011 (38:6 Md. R. 393)
History: Regulation .03C amended effective October 9, 2006 (33:20 Md. R. 1612)
History: Regulation .03D amended effective March 21, 2011 (38:6 Md. R. 393)