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This entry was published on 2014-09-22
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SECTION 1613-C
Crediting of lottery prizes against liabilities for taxes administered by the commissioner
Tax (TAX) CHAPTER 60, ARTICLE 34
§ 1613-c. Crediting of lottery prizes against liabilities for taxes
administered by the commissioner. (1) The director, on behalf of the
division, shall enter into a written agreement with the commissioner, on
behalf of the department, within sixty days of the effective date of
this section, which will set forth procedures for crediting lottery
prizes of more than six hundred dollars awarded to holders of winning
lottery tickets, whether individuals, corporations, associations,
companies, partnerships, limited liability partnerships or companies,
partners, members, managers, estates, trust fiduciaries or entities,
against past due tax liabilities owed by such holders for any tax
administered by the commissioner, about which the director has been
notified by the commissioner pursuant to the provisions of such
agreement.

(2) Such agreement shall apply to any past due tax liability which
arises from (i) an enforceable warrant or judgment, (ii) an enforceable
determination of an administrative body which is no longer subject to
administrative or judicial review, or (iii) an assessment or
determination (including self-assessment or self-assessed determination)
which has become final or finally and irrevocably fixed and no longer
subject to administrative or judicial review.

(3) Such agreement shall include:

(a) the procedure under which the department will notify the division
of tax liabilities, including when the division will be notified and the
content of that notification;

(b) the procedure for reimbursement of the division by the department
for the cost of carrying out the procedures authorized by this section;
and

(c) any other matters the parties to the agreement deem necessary to
carry out the provisions of this section.

(4) Prior to awarding lottery prizes of more than six hundred dollars,
the division shall review the most recent notice of tax liabilities
provided by the commissioner. For holders of winning lottery tickets
identified on that notice, the division shall credit to the department
the amount of each holder's prize necessary to satisfy that holder's tax
liability, and the remainder of the prize shall be awarded to the holder
of the winning ticket.

(5) If the division has also received a notice of liability of a prize
winner for past-due support or public assistance benefits pursuant to
section sixteen hundred thirteen-a or sixteen hundred thirteen-b of this
article, then the amount of any prize shall be first credited or applied
to the income tax required to be withheld by law, then as required by
section sixteen hundred thirteen-a or sixteen hundred thirteen-b of this
article, then to the past due tax liability as required by this section.
The balance will then be paid to the holder of the winning lottery
ticket.

(6) The division shall certify to the comptroller the total amount of
the lottery prize to be credited against past due tax liabilities and
the remainder of the prize to be awarded to the holder of the winning
lottery ticket.

(7) The division shall notify the holder of the winning lottery
ticket, in writing, of the total amount of the lottery prize credited
against past due tax liabilities and the remainder of the prize to be
awarded to the holder. That notice must also advise the holder that the
department will provide separate notice, in writing, of the procedure
for and time frame by which the holder may contest such crediting.

(8) The department shall notify the holder of the winning lottery
ticket, in writing, of the amount of a prize to be credited against past
due tax liabilities and the procedure for and time frame by which the
holder may contest the crediting of the prize.

(9) From the time the division is notified by the department of a past
due tax liability of a holder of a winning lottery ticket, the division
shall be relieved from all liability to the holder, and the holder's
heirs, representatives, estate, successors or assigns for the amount of
a prize certified to the comptroller to be credited against past due tax
liabilities and the holder and the holder's heirs, representatives,
estate, successor or assigns shall have no right to commence a court
action or proceeding or to any other legal recourse against the division
to recover any amount certified to the comptroller to be credited
against past due tax liabilities. Provided however, nothing herein shall
be construed to prohibit a holder of a winning lottery ticket and the
holder's heirs, representatives, estate, successors or assigns from
proceeding against the department to recover the part of the prize
certified to the comptroller and credited to past due tax liabilities
which is greater than the amount of past due tax liabilities owed by
that holder on the date of certification.

(10) Notwithstanding any law to the contrary, the department and its
officers and employees may furnish to the division any abstract of any
tax return or report, or any information concerning an item contained in
any such return or report or disclosed by any investigation of tax
liability under this chapter, but only for the purpose of crediting
lottery prizes against past due tax liabilities described in subdivision
two of this section.