Legal Authorities:
68 O.S. § 205.2 Claim Requesting Deduction – Hearing – Notice – Priority – Rules, Regulations and Procedures
OAC 340:25-5-200 – Enforcement
OAC 340:25-5-235 – Collection of past support and overpayments from state tax refund offset
The Oklahoma Tax Refund Intercept program matches, referrals, modifications and deletions are all fully automated.
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 populated;
- on OBLI screen: TERM RSN, DATE zeros or blank;
- Principal and interest greater than $50.00 (***see note); 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).
The Referral Process:
- Weekly submission on Wednesday for all eligible cases.
- 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 “Notice of Offset” (form number OTC03 – cannot be manually generated). Child support specialists should inform NCPs and their spouses they have 30 days from the date shown on that notice 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.
Both CSS and the OTC issue notices of intercept of state tax refund at about the same time. The notice received by our customers, mailed by the Oklahoma Tax Commission, 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.
Injured Spouses:
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 may complete 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, if desired, but it is not required). Preferably, 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:
Please send to:
file:///.///S94X01.okdhs.int/Workgroups/CSED/Shared documents/Shared -STO-Other documents WARNING contains FTI Do Not Disclose To Unauthorized Persons/CCP WARNING contains FTI Do Not Disclose To Unauthorized Persons/INJ SP CLAIM DOC
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.
Hearing Process:
Oklahoma law at 68 O.S. § 205.2 requires that an obligor or a spouse “request a hearing”, in writing, if they contest the offset of their state tax refund to pay a child support debt and that the agency holding the debt “shall grant a hearing”. §205.2(C). It has been determined that CSS need to set those requested hearings at the time that a Notice of Administrative Review Decision document (“NOARD” in ALC) is issued.
By far, most requests for hearing come from a joint taxpayer that is not obligated to pay a child support debt – i.e. a “non-obligated” or “injured” spouse. CSS District Offices currently gather the documents required to process the review of the injured spouse claim and send the necessary documents to the State Tax Offset Program Coordinator in the Center for Coordinated Programs.
After the calculations determining the injured spouse portion, if any, CCP staff will issue the NOARD for Injured Spouse claims, set the hearing on the STO docket for OAH, and send a Notice of Hearing. CCP Attorneys will be assigned to handle the hearings.
Both CARE and District Offices should refer (or forward) ALL communications regarding the injured spouse claim to CCP.
It is also possible for a child support obligor (NCP) to request a hearing and contest the offset of their state income tax refund. Per 68 O. S. §205.2 and DHS Policies 340: 25-5-235 and 340: 25-5-244, the person whose income tax refund was offset may contest the offset as well. Generally, the only allowable grounds for those NCP claims are a) they are the wrong person; or b) the amount offset is higher than the balance of child support arrears. District Offices should forward any requests for hearings by NCPs to the State Tax Offset Program Coordinator and a determination of how to proceed will be made at CCP. The District Office should be prepared to assist with NCP claims that the arrears balance is not sufficient to justify the offset amount by preparing an Arrears Computation.
Deletions and Suppressions:
No manual updates are required for deletions or referrals to this program.
Should you require an offset be suppressed, please contact the State Tax Refund Offset Coordinator.
In-House Procedure for Erroneous Offsets:
Erroneous offsets are refunds taken in error, such as wrong SSN, wrong person, incorrect balances, bankruptcy, etc. If an incorrect person has been offset, the local office should obtain appropriate identifying information from the individual to ensure the offset was erroneous. CSS 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. It is not necessary for the local office to provide the identification used to determine the offset was erroneous to the Coordinator.
Important Screens in the Offset Referral/Refund Process:
- OTCI – CSS Oklahoma Tax Inquiry/Referral Screen
- CFRR – Receipt Screen
- UNDA – Undistributed Receipts
- CSEA(S) – CSED Enforcement Update screen to suppress OTC referral