Menu Help & How To Video Simulation Game Document & Resources Training Link Tag Search clock thumbs-up angle-up

State Tax Offset

The Oklahoma Tax Refund Intercept program matches, referrals, modifications and deletions are all fully automated. This automation allows you to minimize the time invested in this special collection/enforcement remedy.

The Benefits:

  • Increased collections using automation;
  • Decrease in the time child support specialists spend on manual generation of paperwork at the local office level; and
  • Compliance with State and Federal laws and regulations for the offset process.

The OTCI Screen:

The OTCI screen lists valuable information regarding case balances, including principal arrears, accrued interest and overpayment balance, if any. The total balances are current as of the last referral cycle. Since case submissions occur weekly, the balances you see on OTCI are current as of the previous Wednesday. Some cases also list address information as provided by the Oklahoma Tax Commission (OTC).

Referral Criteria:

The OTC Analyzer Logic looks at the following and includes the case in the referral logic for OTC Tax Intercept if ALL these conditions exist:

  • Full service case in active status of 02, 06, 08 or 10;
  • OTC referral status not currently suppressed on CSEA(S);
  • Obligation screen requirements:
    • on OBLI screen: ORDR Status “A” (Active) or “C” (Concurrent);
    • on OBLI screen: ORDR VER DATE and DTE SIGNED properly completed;
    • on OBLI screen: TERM RSN, DATE zeros or blank;
  • Principal and interest greater than $50.00; and
  • Overpayments greater than $50.00 to offset CP OTC refund
    (overpayments are referred on open and closed cases once criteria is met).

The OTC Analyzer Logic considers the following and excludes the case in the referral logic for OTC Tax Intercept if ANY of the following conditions exist:

  • Cases with arrears of less than one month current child support;
  • Cases in all priorities will be referred once all criteria is met.
  • Case status 10 reason codes 18, 28 and 29; or
  • OTC referral currently suppressed on CSEA(S).
Please note: For customers paying by Income Withholding from a bi-weekly pay cycle, DHS does NOT refer cases for offset unless at least the amount of current support, or $50, whichever is greater, is due.  This programming was implemented more than 10 years ago specifically to accommodate for customers paying by Income Withholding from a bi-weekly pay cycle.

The Referral Process:

  • Weekly submission on Wednesday for all eligible cases. The weekly submission adds new cases and obligations and will update amounts due automatically;
  • Balances will be determined as of time of referral; and
  • No manual updates needed – No Outlook request from local office to Special Collections Office needed.The CIRI screen, page 2 has been modified to display OTC referral date and amount. Note the appearance of the amount referred on CIRI is limited by system constraints. The following example from CIRI, page 2 reflects that on 11/02/09 the case was referred to OTC for $125,243.00.In this example the CIRI screen page 2 will display as follows:
    (OTC: REFERRED TO OTC   11/02/09  0125243)

The “Refund Intercepted by OTC” Notice:

CSS will mail the NCP an auto-generated “Refund Intercepted by OTC” notice (form number OTC03 – cannot be manually generated using docgen). Child support specialists should inform NCPs and their spouses they have 30 days from the date shown on the initial notice (the one from OCSS) to request the injured spouse’s portion. After the 30 days has elapsed from the initial intercept date listed on OTCI, the request for the injured spouse’s portion will be denied. The “Refund Intercepted by OTC” on the OTCI transaction/screen is the initial intercept date and will be the date shown on the OTC03. Child support specialists do not have to request a copy of the initial notice from the NCP or their spouse since the date of the intercept is available to you on the OTCI transaction.

CSS, not the OTC, generates the first notice (CSS form number OTC03). The first notice lists the Department of Human Services, Child Support Services and the CARE line phone number on it. It has the respective local office’s address on it and the NCPs name and address. The subject line is “Your Oklahoma State Tax Refund“. This notice provides the Oklahoma Statute that authorizes CSS to offset their refund for collection of past due child support. It also advises them of their right to contest the intercept. These first notices are now available to view on DOCL and by using the NL/NI transaction but cannot be manually generated.

The second notice received by our customers is mailed from the Oklahoma Tax Commission and is entitled “NOTICE OF REFUND DISBURSAL”. This notice is generated by OTC when an intercept of a state tax refund occurs.  If there is any question about time frames connected with the program, please contact the State Tax Offset program coordinator at STO by phone or email.

Distribution Notes:

Any changes made to a case are automatically transmitted to the OTC weekly (every Wednesday).

The OTC sends offsets to CSS immediately upon interception (same day). Once received by OTC, the daily intercepts are placed on UNDL (SPD) screen for the 45-day hold before disbursement. The UNDL (SPD) receipts are monitored and adjusted by the Center for Coordinated Programs (CCP), not by the local office. If viewing UNDA the receipt will be visible, but will not be placed on the local office UNDL until the 45-day hold period has expired. When the 45-day hold period is expired and the local office has not advised CCP of any reason the receipt should be held further, the receipt(s) are automatically disbursed by OSIS to individual cases. The OTC offsets received by CSS are usually logged to the system within three (3) business days. Please note that the statute and policy require a 30-day hold. CSS allows 45-days to accommodate mailing and processing time.

After the receipt is processed on the SPD UNDL, if the receipt cannot apply for any reason, regular local office UNDL edits and logic apply. Once a receipt is logged to the local office UNDL, the State Tax Offset Program Coordinator will not monitor or review. The UNDL receipts become the responsibility of the local office.

The Refund Process:

On occasion, amounts intercepted from a state tax refund will need to refund to the NCP rather than apply to the case balances. If this need occurs, email the refund request to the State Tax Offset Program Coordinator and document the request for refund on caselog. If it is determined all or part of the receipt needs to refund prior to the 45-day hold period elapsing, contact the State Tax Offset Program Coordinator for case by case review.

To use these forms copy and paste the links below in the explorer address bar:
Outlook>Public Folders> OCSS All> Center for Coordinated Programs> CSED Forms Library> IRS, OTC and Admin. Debt Written Refund Request document (11/24/2003).

 

Injured Spouses:

To use these forms copy and paste the links below in the explorer address bar:
Outlook> Public Folders> OCSS All> Center for Coordinated Programs> CSED Forms Library> Injured Spouse Computation form (11/23/2003).

Injured spouses must request their portion of an OTC intercept be refunded within 30 days from the date of the offset notice they receive.  The date of the offset notice is the “Refund Intercepted by OTC” date on the OSIS OTCI transaction. Injured spouses must contact the local office. The local office completes the “Injured Spouse’s Computation Form” (please note, this form IS NOT completed or signed/notarized by the injured spouse – the local office worker is the only one who completes any portion of the form). Or, send the below listed required documentation to the State Tax Offset Program Coordinator who will happily process the Injured Spouse Claim for the local office. Document the date the injured spouse request was received in the local office on CSLOGA so State Office can make a fair determination. All Injured Spouse Claims on State Tax Intercepts sent to the Special Collections Office must include the following:

Required Documentation for Injured Spouse Claim:

1. Written request for hearing from the spouse (no need to set hearing, the request for hearing is needed for our records).
2. Complete copies of the federal and state income tax returns.
3. All W-2 and 1099 forms involved in the claim. (both the NCP and Spouse W-2s and 1099s)

If an injured spouse claim is received, but does not contain all required documentation listed above, emailing a “heads up” to the Coordinator to place a “hold” on the funds on UNDL will greatly help to avoid/decrease erroneous overpayments and special collection efforts.

Deletions and Suppressions:

Since the automation is now fully in place no manual updates are required for deletions or referrals to this program.

Note: If Federal offset has been received and it satisfies the amount due, we can refund the OTC offset. The referral will automatically delete on the next referral cycle.

Should you require an offset be suppressed, please contact the State Tax Refund Offset Coordinator.

Note: See CSEAS material for exclusion and suppression information.

In-House Procedure for Erroneous Offsets:

Erroneous offsets are refunds taken in error, such as wrong SSN, wrong person, incorrect balances, bankruptcy, etc. We can refund these offsets before distribution of any funds from the OTC offset if the NCP sends a copy of the offset notice to the local office. The local office in turn completes a written refund request and forwards the letter and the refund request to the State Tax Offset Program Coordinator.

Important Screens in the Offset Referral/Refund Process:

  • OTCI – CSS Oklahoma Tax Inquiry/Referral Screen
  • CFRR – Receipt Screen
  • CFRBX – Undistributed Receipts
  • CSEA(S) – CSED Enforcement Update screen to suppress OTC referral

Legal Authority:

68 O.S. § 205.2

OKDHS Policy:

340:25-5-200 – Scope and applicability
340:25-5-244 – Review procedures
340:25-5-235 – Collection of past support and overpayments from state tax refund offset