Section 15. (a) As used in this section, the following words shall, unless the context clearly requires otherwise, have the following meanings:

Ask a legal question, get an answer ASAP!
Click here to chat with a lawyer about your rights.

”Federal nontax liability”, a delinquent nontax liability certified by a federal official including, but not limited to, any interest, penalty, fine, fee or other nontax assessment imposed by or payable to the federal government that is finally determined to be due and owing.

”Federal official”, a unit or official of the federal government charged with the collection of federal nontax liabilities payable to the federal government and with the authority to enter into the offset agreement.

”Offset agreement”, the agreement between the commissioner, the state comptroller and the Secretary of the Treasury authorized by this section and section 19 of chapter 7A.

”State tax liability”, a delinquent tax liability certified by the commissioner including, but not limited to, any tax, interest, penalty or other addition to a tax imposed by or payable to the commonwealth that is finally determined to be due and owing pursuant to chapter 62C.

(b) Notwithstanding any other general or special law to the contrary, in coordination with the comptroller pursuant to section 19 of chapter 7A, the commissioner may enter into an offset agreement with the Secretary of the Treasury to participate in a reciprocal Treasury Offset Program pursuant to 31 U.S.C. § 3716 for the collection of any state tax liabilities owed to the commonwealth from federal payments to vendors and contractors. The offset agreement may provide for the United States to submit federal nontax liabilities owed to federal agencies for offset against refunds otherwise due and owing to taxpayers.

(c) Under the offset agreement, a federal official may: (1) certify to the commissioner the existence of a person’s delinquent federal nontax liability, owed by the person to the federal government, by providing: (i) the full name and address of the person and any other names known to be used by the person; (ii) the social security number or federal tax identification number of the person; (iii) the amount of the federal nontax liability; (iv) a statement certifying that the liability is past due, that due process has been provided and that the liability is legally enforceable in the amount certified, which may be provided in procedures for certifying payments in the offset agreement; and (v) any other information needed under the agreement; (2) request the commissioner to withhold any refund to which the person is entitled; and (3) retain a portion of the proceeds of any federal administrative setoff authorized by the federal offset program.

(d) As required or permitted by state law, federal law or the offset agreement, the commissioner shall: (1) determine if a person for whom a certification is received is due a refund; (2) withhold a refund that is due a person whose name has been certified by a federal official; (3) notify the person of the amount withheld in satisfaction of the federal nontax liability certified by a federal official; and (4) pay to the federal official the lesser of the entire refund or the amount certified plus any fee due under subsection (g) and pay any refund in excess of such amount to the person.

(e) The commissioner may certify to a federal official a person’s delinquent state tax liability owed to the commonwealth by providing the federal official: (i) the full name and address of the person and any other names known to be used by the person; (ii) the social security number or federal tax identification number of the person; (iii) the amount of the state tax liability; (iv) a statement certifying that the state tax liability is past due, that due process has been provided and that the liability is legally enforceable in the amount certified, which may be provided in procedures for certifying payments in the offset agreement; and (v) any other information required by state statute or regulation applicable to the collection of the state tax liability by offset of federal payments to vendors and contractors.

(f) The commissioner may request that the federal official withhold the lesser of any federal vendor or contractor payment to which the person is entitled under the offset agreement or the amount certified plus any fee due under subsection (g).

(g) The commissioner shall establish a reasonable administrative fee to be charged to the person for the state offset of a federal nontax liability or the federal offset of a state tax liability. The fee shall be a separate charge and may be withheld from any refund. State administrative fees may be retained by the commissioner and shall be deposited in a separate revolving fund to be used by the commissioner, without further appropriation, for the costs in operating the offset program.

(h) Notwithstanding section 21 of chapter 62C or any other law prohibiting disclosure by the department of the contents of a taxpayer’s records or information, all information exchanged to accomplish and effectuate the intent of this section shall be lawful.

(i) If an individual filed a joint income tax return and the federal nontax liability certified by a federal official is not the liability of both parties to the joint income tax return, the commissioner may not withhold or pay to the federal official that portion of the income tax refund attributable to the individual not owing the liability. The commissioner shall adopt procedures notifying parties to a joint income tax return of a proposed offset of a refund for a federal nontax liability certified by a federal official. The parties to the return shall have 60 days to assert, in writing, that a portion of the income tax refund is attributable to the individual not owing the federal nontax liability. If no such assertion, by a party to the joint return, is made within 60 days of notice, all of the refund shall be deemed attributable to the individual owing the liability.