State Income Tax Refund Intercept Hearing Procedure

PURPOSE: This rule prescribes a hearing procedure for taxpayers who protest, in writing, the application of their state income tax refunds to debts owed to the Department of Mental Health. (1) If a taxpayer does not request a hearing, in writing, within thirty (30) days of the receipt of the Notice of Mental Health Debt Offset from the Department of Revenue, then— A) The taxpayer is forever barred from asserting a defense to the application of the tax refund to a debt owed to the Department of Mental Health; and (B) The state income tax refund shall be applied as an offset to the debt owed to the Department of Mental Health. (2) A request for a hearing shall be denied when the request for the hearing— (A) Is not within thirty (30) days of the receipt of the Notice of Mental Health Debt Offset from the Department of Revenue; (B) Is not in writing; (C) Raises issues only which have been previously litigated; and (D) Does not raise any factual issues on the amount of the debt or the responsibility for the debt. (3) A taxpayer’s intercepted state income tax refund shall be relinquished to the taxpayer when the taxpayer asserts and proves any of the following defenses: (A) The debt is for a child under age eighteen (18) and the taxpayer is not the natural or adoptive parent; (B) The debt is for a debtor spouse and the taxpayer was not married to the debtor spouse at the time the debt was incurred; (C) The debt is outlawed by the statute of limitations; (D) The debt is barred from collection by a United States bankruptcy court; (E) The taxpayer was erroneously identified as the debtor because of a mistake in the Social Security number; and (F) Any other valid defense in fact or law appropriate for consideration. (4) In the case of a joint or combined return, the taxpayer named in the return against whom no debt is claimed must file with the Department of Mental Health for an apportionment of the refund within thirty (30) days of the date of receipt of the Notice of Intent to Offset. The Department of Mental Health shall mail to the taxpayer a determination of apportionment within ninety (90) days after the filing of the taxpayer’s application for apportionment of the refund. The department’s decision on apportionment shall be final upon the expiration of thirty (30) days from the date on which the determination of apportionment is mailed, unless within the thirty (30)-day period from the mailing date of the determination, the taxpayer applies to the Department of Mental Health for a hearing with the Department of Mental Health on the issue of apportionment. The hearing shall be conducted by the director or his/her designee. (5) An evidentiary hearing shall be scheduled when the amount of the debt or the responsibility for the debt can not be resolved, except by a hearing. If an evidentiary hearing is required, the Department of Mental Health shall set the time and place for the hearing. Failure of the taxpayer to appear at the time and place scheduled for the hearing shall be deemed an acknowledgement of the debt by the taxpayer and shall result in debt offset. The hearing, if held, shall be conducted in accordance with the provisions of Chapter 536, RSMo. AUTHORITY: sections 143.787 and 630.050, RSMo 1986.* Original rule filed April 26, 1991, effective Sept. 30, 1991. *Original authority: 143.787, RSMo 1982 and 630.050, RSMo 1980.