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SECTION 171-F
Certain overpayments credited against outstanding debts owed to a state agency
Tax (TAX) CHAPTER 60, ARTICLE 8
§ 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.