N.Y. Tax Law § 171-f: Certain overpayments credited against outstanding debts owed to a state agency

§ 171-f. Certain overpayments credited against outstanding debts owed

to a state agency. (1) For the purposes of this section, (a) "state

agency" shall mean any state department, board, bureau, division,

commission, committee, public authority, public benefit corporation,

council, office, or other governmental entity performing a governmental

or proprietary function for the state, or, solely for purposes of this

section, a local social services district; (b) "taxpayer" shall mean a

corporation, association, company, partnership, estate, trust,

liquidator, fiduciary or other entity or individual who or which is

liable for any tax or other imposition imposed by or pursuant to article

nine, nine-A, twenty-two, thirty, thirty-A, thirty-B or thirty-three of

this chapter or article two-E of the general city law, which tax or

other imposition is administered by the commissioner of taxation and

finance, or who or which is under a duty to perform an act under or

pursuant to such tax or imposition, excluding a state agency, a

municipal corporation or a district corporation; and (c) "overpayment"

shall mean an overpayment which has been requested or determined to be

refunded, a refund or a reimbursement, of a tax or other imposition

imposed by or pursuant to article nine, nine-A, twenty-two, thirty,

thirty-A, thirty-B or thirty-three of this chapter or article two-E of

the general city law, which is administered by the commissioner of

taxation and finance.

(2) The commissioner of taxation and finance, upon agreement with the

state comptroller and acting as an agent for the state comptroller,

shall set forth the procedures for crediting any overpayment by a

taxpayer of any tax or other imposition imposed by or authorized to be

imposed pursuant to article nine, nine-A, twenty-two, thirty, thirty-A,

thirty-B or thirty-three of this chapter or article two-E of the general

city law, which is administered by the commissioner of taxation and

finance, and the interest on any such overpayments, against the amount

of a past-due legally enforceable debt owed by such taxpayer to a state

agency. An implementation plan shall be developed by the division of the

budget and the department of taxation and finance which shall provide,

but not be limited to, guidance with respect to coordination of debt

collection pursuant to this section and subdivision twenty-seventh of

section one hundred seventy-one of this article. This section shall not

be deemed to abrogate or limit in any way the powers and authority of

the state comptroller to set off debts owed the state against payments

from the state, under the constitution of the state or any other law.

(3) For purposes of this section a past-due legally enforceable debt

against which an overpayment and interest thereon may be credited shall

include any applicable interest or late payment charge and is a debt:

(a) as to which the state has (i) obtained a judgment and (ii) given

such notice as is required in subdivision (d) of section five thousand

two hundred twenty-two of the civil practice law and rules; or

(b) as to which a state agency has (i) made a final administrative

determination where the taxpayer had the opportunity for an adjudicatory

proceeding to which article three of the state administrative procedure

act is applicable, or the taxpayer had an opportunity for a proceeding

which substantially complies with the requirements of such article three

where such article three is not applicable, or the taxpayer was afforded

such notice and opportunity to be heard as satisfies due process

requirements applicable to such state agency and to such debt, except

that if, pursuant to law or regulation, the debt is not collectible

unless the state agency obtains a judgment, then the debt will not be

considered a past-due legally enforceable debt for purposes of this

section until such state agency has obtained a final judgment no longer

subject to judicial review and (ii) which cannot be collected by

administrative offset by the referring state agency against amounts

payable to the taxpayer by the referring department; and

(c) with respect to which the state agency or the department of law

has notified the taxpayer in writing, or has made a reasonable attempt

to so notify the taxpayer at the taxpayer's last address known to such

state agency (i) that the debt, which is clearly identified as to amount

and nature, is past-due and unless paid within thirty days thereafter,

would be referred to the department of taxation and finance to be offset

against an overpayment; (ii) that state law permits the offset of

certain overpayments against such debts; (iii) that the taxpayer may

request a review of the proposed referral for offset by contacting the

state agency at a telephone number or an address disclosed in the

notice; and (iv) that the taxpayer may present, to the state agency,

written evidence and arguments in support of his defense to the proposed

referral or may appear at a scheduled conference with the state agency

to present oral arguments and written and oral evidence in support of

such defense; provided, however, that nothing herein shall be deemed to

afford the taxpayer the opportunity to reargue any issue which was, or

could have been, adjudicated in the proceeding described in paragraph

(a) or (b) of this subdivision; and

(d) which the state agency which is the creditor or the department of

law, as the case may be, certifies to the commissioner of taxation and

finance is past-due and legally enforceable.

(4) The procedures set forth by the commissioner of taxation and

finance for crediting any overpayments, and the interest on any such

overpayments, against a past-due legally enforceable debt pursuant to

this section shall include but shall not be limited to:

(a) the procedure under which the creditor state agency shall notify

the commissioner of taxation and finance of a past-due legally

enforceable debt due from a taxpayer, specifying when the department

will be notified, the information to be contained in such notification

and the form and format to be used for such notification;

(b) the minimum amount of a past-due legally enforceable debt against

which the commissioner of taxation and finance shall credit an

overpayment of tax;

(c) a provision providing that information furnished to the

commissioner of taxation and finance and the comptroller pursuant to

such procedures shall be considered confidential and shall not be

disclosed, except as otherwise allowed in this chapter;

(d) a provision providing that information furnished by the

commissioner of taxation and finance pursuant to such procedures shall

be considered confidential and shall not be disclosed, except the amount

of the overpayment and interest thereon which has been credited may be

disclosed to the taxpayer, and the amount so credited and the

information necessary to properly identify the taxpayer may be disclosed

to the creditor state agency; and

(e) the procedure for reimbursement of the comptroller by the revenue

arrearage account, pursuant to section ninety-one-a of the state finance

law, for any overpayment and interest thereon which has been credited

against the past-due legally enforceable debt owed by a taxpayer filing

a joint return, but which has been refunded by the comptroller, pursuant

to paragraph six of subsection (b) of section six hundred fifty-one of

this chapter, to a spouse not liable for the amount of a past-due

legally enforceable debt owed by such taxpayer.

(5)(a) In calculating the amount of an overpayment and interest

thereon which shall be credited against the amount of a past-due legally

enforceable debt owed by a taxpayer which is certified to the department

of taxation and finance for collection pursuant to this section, the

department of taxation and finance shall first credit the overpayment

and interest thereon against any:

(i) liability of such taxpayer in respect of any tax or other

imposition imposed by this chapter and administered by the commissioner

of taxation and finance;

(ii) liability of such taxpayer for any tax or other imposition

imposed pursuant to the authority of this chapter or any other law if

such tax is administered by the commissioner of taxation and finance;

(iii) estimated tax for the succeeding taxable year if such taxpayer

claims such overpayment or a portion thereof as a credit against

estimated tax for such succeeding taxable year pursuant to subsection

(e) of section six hundred eighty-six or subsection (b) of section one

thousand eighty-six of this chapter or subdivision (e) of section

11-1786 of the administrative code of the city of New York or for any

tax imposed pursuant to the authority of this chapter or any other law

if such tax is administered by the commissioner of taxation and finance;

(iv) past-due support owed by the taxpayer pursuant to section one

hundred seventy-one-c of this article;

(v) unreimbursed medical assistance paid on behalf of a child payable

pursuant to section three hundred sixty-seven-a of the social services

law;

(vi) the amount of a default in repayment of a state university or

city university loan pursuant to section one hundred seventy-one-e of

this article.

(b) Only the balance remaining, after the overpayment and the interest

thereon has been credited as described in paragraph (a) of this

subdivision, shall be certified to the comptroller as an overpayment

plus any interest to be credited, in accordance with paragraph (g) of

subdivision three of section one hundred seventy-one-l of this article,

against a past-due legally enforceable debt that has been certified to

the commissioner of taxation and finance for collection pursuant to this

section, and/or a city of New York tax warrant judgment debt that has

been certified to the commissioner of taxation and finance for

collection pursuant to section one hundred seventy-one-l of this

article, with the remainder to be refunded to the taxpayer if such

remainder is not required to satisfy the amount of a default in

repayment of a guaranteed student loan pursuant to section one hundred

seventy-one-d of this article. If a taxpayer owes past-due legally

enforceable debt that has been certified to the commissioner of taxation

and finance for collection pursuant to this section and city of New York

tax warrant judgment debt that has been certified to the commissioner of

taxation and finance for collection pursuant to section one hundred

seventy-one-l of this article, then the overpayment and interest thereon

shall be credited against the debts in the order in which the debts

accrued.

(b-1) No taxpayer who has applied for, and is eligible for, an earned

income tax credit under subsection (d) of section six hundred six of

this chapter shall have more than ten percent of any tax overpayment

credited against a past due legally enforceable debt owed to the office

of temporary and disability assistance for an overpayment of public

assistance unless such debt was incurred as a result of false or

misleading statements or other grounds set forth in section one hundred

forty-five-c of the social services law, which led to a sanction under

such section.

(c) If a taxpayer owes more than one past-due legally enforceable debt

which is certified to the commissioner of taxation and finance for

collection pursuant to this section, the overpayment and interest

thereon shall be credited against the debts in the order in which the

debts accrued. A debt shall be considered to have accrued at the time at

which the debt became past-due.

(6) The commissioner shall (a) certify to the comptroller the amount

of each overpayment and the interest on such amount to be credited

against each past-due legally enforceable debt pursuant to this section,

the total amount of each such overpayment and the interest on each such

overpayment, and the balance, if any, of each such overpayment and

interest thereon to be refunded to the taxpayer, and (b) shall certify

to the comptroller, with regard to each such past due legally

enforceable debt, the amount of liability underlying such debt which is

creditable to unemployment insurance tax, federal funds, federal trust

funds or fiduciary funds, or to the office of temporary and disability

assistance or a local social services district relating to overpayment

of grants and allowances of public assistance or to the department of

health relating to overpayments of medical assistance made to

individuals who are or have been enrolled as providers in the New York

state medical assistance program as established under title eleven of

article five of the social services law.

(7) The commissioner of taxation and finance shall notify each

taxpayer who makes an overpayment, in writing, of the amount of such

overpayment and the interest thereon certified to the comptroller as an

amount to be credited against a past-due legally enforceable debt which

has been certified to the commissioner of taxation and finance pursuant

to this section and of the name of the state agency which certified the

amount to the commissioner of taxation and finance. Such notice shall

include notification to any other person who may have filed a joint

return with the taxpayer of the steps such other person may take in

order to secure his or her proper share of the refund.

(8) From the time the commissioner of taxation and finance is notified

by a creditor state agency of a past-due legally enforceable debt due

from a taxpayer, the commissioner of taxation and finance shall be

relieved from all liability to such taxpayer or its assigns, successors,

heirs or representatives for the amount of an overpayment and interest

on such amount certified to the comptroller, to be credited against the

amount of a past-due legally enforceable debt to be collected pursuant

to this section, and such taxpayer shall have no right to commence a

court action or proceeding or to any other legal recourse against the

commissioner of taxation and finance to recover such overpayment or any

interest thereon certified to the comptroller to be credited against the

amount of a past-due legally enforceable debt. Provided, however,

nothing herein shall be construed to preclude any legal, equitable, or

administrative action by such taxpayer against the certifying state

agency to which the amount of overpayment and any interest thereon was

credited, with reference to the amount thereof which is greater than the

amount of such past-due legally enforceable debt owed by such taxpayer

on the date of such certification.