CHAPTER 105
FORMERLY
SENATE BILL NO. 143
AN ACT TO AMEND CHAPTER 11, TITLE 30, OF THE DELAWARE CODE TO ALLOW SET-OFF OF INCOME TAX OVERPAYMENTS AND REFUNDS BY THE DIVISION OF REVENUE.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:
Section 1. Amend Chapter 11, Title 30, Delaware Code, by adding thereto new Sections 1205, 1206, 1207,1208, and 1209, to read as follows:
"§1205. Setoff
Whenever any taxpayer shall be determined by the Director of Revenue to be entitled to any refund of personal Income taxes pursuant to this Chapter, and at the same time the taxpayer shall be indebted to a claimant agency, or the claimant agency acting in behalf of an individual or other government entity, the Director of Revenue, subject to conditions and limitations expressly set forth in this Chapter may apply, or cause to be applied, the refund, or so much of it as shall be necessary to satisfy the indebtedness.
§1206. Definitions
(a) 'Claimant agency' means the Department of Health and Social Services.
(b) 'Indebted', 'Indebtness', and 'debtor' refers to any liquidated sum due and owing which has accrued through contract, subrogation, tort, or operation of law regardless of whether there is an outstanding judgment for that sum.
§1207. Regulations
The Division of Revenue shall promulgate regulations providing for:
(a) Procedures and methods to be employed by a claimant agency with respect to operation of the provisions of Sections 1205 through 1209 of this Chapter.
(b) Due notice to the debtor and any spouse with whom the debtor files a joint return of the set-off and of the opportunity, upon request, for a hearing before the claimant agency prior to any set-off.
The administrative appeal provisions of this subsection shall be exclusive and any administrative appeal procedures contained in any other section of the Delaware Code shall not pertain to the notice and hearing required under this subsection.
(c) Safeguards against the disclosure or inappropriate use of any personally identifiable information regarding the debtor obtained or maintained pursuant to this Chapter.
(d) A minimum indebtedness, amounts below which, in light of administrative expenses and efficiency, shall not be subject to the set-off procedures set forth in this Chapter; and
(e) Reimbursement by the claimant agency of all costs, direct, and indirect, determined on a statistical or actual basis, of effectuating the procedures set forth in Sections 1205 through 1209 of this Title.
Such regulations issued in pursuance of this Section shall have the force and effect of law.
§1208. Remedy not exclusive
The corrective remedy authorized by Sections 1205 through 1209 of this Chapter is in addition to, and not in substitution for, any other remedy available by law.
§1209. Joint and combined returns
(a) In the event the debtor shall be due a refund jointly with his or her spouse, by virtue of their having filed a joint return, the Director of Revenue may, in the first instance, consider such refund to be totally the property of the debtor spouse and subject to set-off.
In such event, however, he shall notify the nondebtor spouse in accordance with §1207(b) of this Title of his intention to withhold such refund. The nondebtor spouse may, within 30 days of the mailing of said notice, file a written protest with the Director of Revenue to show that, in whole or in part, the set-off refund is attributable solely to the taxes due and prior payments of the nondebtor taxpayer. If this showing is made, the Director of Revenue shall promptly recompute the set-off and refund and direct that the State Treasurer remit the recomputed refund to the nondebtor spouse.
(c) In the event the debtor shall be due a refund in combination with a nondebtor by virtue of their having filed separately but combined on one return, the Director of Revenue shall regard each spouse as entitled to separate refunds based upon the taxes due and prior payments of each spouse individually. In such an event, the set-off provisions of Sections 1205 through 1209 of this Title shall not be applicable to the refund due to the nondebtor spouse, but such provisions shall he applicable in full to any refund attributable to the debtor spouse individually."
Approved July 6, 1983