N.D. Sup. Ct. Admin. R.
INCOME TAX RETURN SETOFF FOR UNPAID COURT-ORDERED FINES, FEES, AND COSTS - Administrative Rule 55
Section 1. Purpose. This rule implements N.D.C.C. ch. 57-38.3, which enables the state court administrator on behalf of the state courts to seek a setoff against income tax refunds for purposes of satisfying unpaid court-ordered fines, fees, or costs.
Section 2. Identification and Submission of Unpaid Fines, Fees, or
Costs. On at least an
annual basis, the state court administrator
identify persons owing unpaid fines,
fees, or costs deemed delinquent. For purposes of this rule, an unpaid fine, fee, or cost is
delinquent if payment has not been received within ninety days of the payment due date. The
state court administrator shall must certify to the tax
commissioner the full name and social
security number of each person obligated to the pay the unpaid amount and the amount of
the outstanding obligation, which must exceed twenty-five dollars. The state court
administrator shall must provide any additional information
required by the tax commissioner
to initiate the setoff process.
Section 3. Notice Requirements - Joint Return - Hearing Request.
ten 14 days of being
notified by the tax commissioner that a transfer of funds to
achieve a setoff against a person's income tax return has been approved, the state court
administrator shall must provide the person with written notice
setting forth the person's
name, the manner in which the unpaid obligation arose, the amount of the unpaid obligation,
the intention to setoff the person's income tax return against the unpaid obligation, and the
amount of income tax refund in excess of the unpaid obligation, if any.
B. If the income tax return affected by the requested setoff is a joint
return, the notice
required under Section 3A must also set forth the name of the person named in the return,
if any, against whom no debt is claimed; the fact that the unpaid obligation is not claimed
against the person; the fact that the person may be entitled to receive a refund if it is due the
person regardless of the unpaid obligation asserted against the person's spouse; that, in
to obtain a refund due the person, the person must apply in writing within
thirty 30 days of
the date of the mailing of the notice for a hearing with the state court administrator; and that
failure to apply for a hearing within thirty 30 days of the mailing
of the notice will be
deemed a waiver of the opportunity to contest the setoff.
C. Notices required under this section must be sent by first class mail to the address listed on the income tax return.
Section 4. Hearing. If a hearing is requested
with under Section 3B, the
hearing must be held within fourteen 14 days of the request. A
formal hearing is not required
but the state court administrator shall must record the hearing
and retain the recording for six
months. All documents submitted and considered during the hearing must be retained for six
months. Issues to be considered at the hearing are limited to whether the person against
whom the unpaid obligation is asserted was required by court order to pay the fine, fee, or
cost; whether the amount identified for collection is correct; and whether the person
identified in the joint return is entitled to receive a refund regardless of the unpaid obligation
asserted against the person's spouse. The nonobligated spouse shall
must provide to the state
court administrator copies of the obligated and nonobligated spouse's federal W-2 forms and
state and federal tax returns for the affected year of return. If the state court administrator
determines the setoff is proper, the setoff must be limited to a proportionate share of the joint
return amount. The person requesting the hearing must be notified of the state court
administrator's decision within five seven days after conclusion
of the hearing.
Section 5. Appeal. The person requesting a hearing under Section 4
may appeal the decision
of the state court administrator. The person must send or deliver a written notice of appeal
to the state court administrator within
10 14 days after the date
of the mailing of the state
court administrator's decision. Failure to send or deliver the written notice waives the appeal.
An appeal hearing must be conducted within 30 days after receipt by the state court
administrator of the written notice of appeal. The appeal will be conducted by a panel of
three members designated by the Chief Justice. Issues to be considered during the appeal
hearing are limited to issues raised under Section 4 and to whether the state court
administrator's decision was in error.
Section 6. Disposition of Funds Transferred for Setoff. Upon final
determination of the
setoff amount following a hearing under Section 4 or an appeal under Section 5, or upon the
failure of the person to request a hearing under Section 3B, the state court administrator
must submit funds transferred for setoff to the state treasurer for deposit in the manner
provided by law. Any funds in excess of the final setoff amount must be refunded to the
person whose income tax return was the subject of the setoff. Court records must reflect
application of the setoff amount to any outstanding fines, fees, or costs owed by the person
whose tax return was subject to setoff.
Section 7. Confidentiality. Any confidential information provided by the tax commissioner to the state court administrator and any information submitted by a person requesting a hearing as part of the setoff process is confidential and may be used only for collection activities.
Section 8. Effective Date. This rule is effective September 1, 2007.
Dated: August 23, 2007.
Rule 55 was adopted, effective September 1, 2007; and amended, effective March 1, 2011.
Section 3A was amended, effective March 1, 2011, to increase the time for the state court administrator to notify a person about an unpaid obligation from 10 to 14 days after being notified by the tax commissioner.
Section 4 was amended, effective March 1, 2011, to increase the time to notify a person of the state court administrator's decision from five to seven days.
Section 5 was amended, effective March 1, 2011, to increase the time to appeal the state court administrator's decision from 10 to 14 days.
Sources: Joint Procedure Committee Minutes of April 29-30, 2010, page 21.