57-38.3-05. Procedure - Notification of taxpayer

57-38.3-05. Procedure - Notification of taxpayer

1. Within a time specified by the commissioner, a claimant agency seeking to collect a

debt through setoff shall supply the information necessary, in a form and in the manner

prescribed by the commissioner, to identify each debtor whose refund is sought to be

set off and certify the amount of the debt or debts owed by each debtor.

2. If a debtor identified by a claimant agency is determined by the commissioner to be

entitled to a refund of at least twenty-five dollars, the commissioner shall approve the

transfer of an amount equal to the refund owed, not to exceed the amount of the

claimed debt certified, to the claimant agency. When the refund owed exceeds the

claimed debt, the commissioner shall send the excess amount to the debtor within a

reasonable time after such excess is determined.

3. At the time of the approval of the transfer of funds to a claimant agency pursuant to

subsection 2, the commissioner shall notify the claimant agency and the taxpayer or

taxpayers whose refund is sought to be set off of the amount approved for setoff.

4. Upon receipt of notice from the commissioner pursuant to subsection 3, the claimant

agency shall provide the taxpayer with written notice setting forth:

a. The name of the debtor.

b. The manner in which the debt arose.

c. The amount of the claimed debt.

d. The intention to set off the taxpayer's refund against the debt.

e. The amount of the refund in excess of the claimed debt.

f. The taxpayer's opportunity to give written notice to contest the setoff within thirty

days of the date of mailing of the notice.

g. The name and mailing address to which the application for a hearing must be

sent.

h. The fact that failure to apply for such a hearing, in writing within the thirty-day

period, will be deemed a waiver of the opportunity to contest the setoff.

5. In the case of a joint return, a notice provided pursuant to subsection 4 must also set

forth:

a. The name of the taxpayer named in the return, if any, against whom no debt is

claimed.

b. The fact that a debt is not claimed against such taxpayer.

c. The fact that such taxpayer may be entitled to receive a refund if it is due the

taxpayer regardless of the debt asserted against the taxpayer's spouse.

d. That in order to obtain a refund due to the taxpayer, such taxpayer must apply, in

writing, for a hearing with the claimant agency named in the notice within thirty

days of the date of the mailing of the notice.

e. The fact that failure to apply for such a hearing within thirty days of the mailing of

such notice will be deemed a waiver of the opportunity to contest the setoff.

6. Subdivisions f, g, and h of subsection 4 do not apply to debts submitted by the state

court administrator for collection through setoff.

7. Except as provided in this subsection, upon receipt of funds transferred pursuant to

subsection 2, the claimant agency shall deposit and hold such funds in an escrow

account until a final determination of the validity of the debt. The state court

administrator shall submit the transferred funds upon receipt to the state treasurer for

deposit in the manner provided by law unless an application for a hearing under

subsection 5 is received.