MISSISSIPPI LEGISLATURE
2020 Regular Session
To: Ways and Means
By: Representatives Massengill, Steverson
AN ACT TO AUTHORIZE INSTITUTIONS THAT OFFER PROGRAMS THAT REQUIRE REGISTRATION UNDER THE MISSISSIPPI PROPRIETARY SCHOOL AND COLLEGE REGISTRATION LAW TO SUBMIT CERTAIN DEBTS OWED TO THEM TO THE DEPARTMENT OF REVENUE FOR COLLECTION THROUGH A SETOFF AGAINST THE DEBTORS' MISSISSIPPI INCOME TAX REFUND; TO PROVIDE THE AMOUNT OF THE DEBT AND INCOME TAX REFUNDS TO WHICH THIS ACT APPLIES; TO PROVIDE FOR NOTICE TO THE DEBTOR AND AN OPPORTUNITY FOR THE DEBTOR TO CONTEST AND APPEAL THE SETOFF; TO PROVIDE FOR THE DUTIES OF THE DEPARTMENT OF REVENUE UNDER THIS ACT; TO AUTHORIZE THE EXCHANGE OF INFORMATION BETWEEN THE DEPARTMENT OF REVENUE AND CLAIMANT INSTITUTIONS THAT IS NECESSARY TO ACCOMPLISH AND EFFECTUATE THE INTENT OF THIS ACT; TO PROVIDE THAT INFORMATION OBTAINED FROM THE DEPARTMENT OF REVENUE SHALL RETAIN ITS CONFIDENTIALITY AND TO PROVIDE PENALTIES FOR THE UNLAWFUL DISCLOSURE OF SUCH INFORMATION; TO AMEND SECTION 27-7-83, MISSISSIPPI CODE OF 1972, IN CONFORMITY THERETO; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. For the purposes of Sections 1 through 7 of this act, the following words and phrases shall have the meanings ascribed in this section unless the context clearly indicates otherwise:
(a) "Claimant institution" means any institution as defined in Section 75-60-3 which has loaned money to or is owed a debt by an individual for educational and/or instructional purposes.
(b) "Debtor" means any individual owing money or having a delinquent account with any claimant institution, which obligation has not been adjudicated satisfied by court order, set aside by court order, or discharged in bankruptcy.
(c) "Debt" means any liquidated sum due and owing any claimant institution which has accrued through contract, subrogation, tort or operation of law, regardless of whether there is an outstanding judgment for that sum.
(d) "Department" means the Department of Revenue.
(e) "Refund" means the Mississippi income tax refund which the department determines to be due any individual taxpayer.
SECTION 2. The collection remedy authorized by Sections 1 through 7 of this act is in addition to and not in substitution for any other remedy available by law.
SECTION 3. (1) A claimant institution may submit debts in excess of Five Hundred Dollars ($500.00) owed to it to the department for collection through setoff, under the procedure established by Sections 1 through 7 of this act, except in cases where the validity of the debt is legitimately in dispute, an alternate means of collection is pending and believed to be adequate, or such collection would result in a loss of federal funds or federal assistance.
(2) Upon the request of a claimant institution, the department shall setoff any refund against the sum certified by the claimant institution as provided in Sections 1 through 7 of this act.
SECTION 4. (1) Within the time frame specified by the department, a claimant institution seeking to collect a debt through setoff shall supply the information necessary to identify each debtor whose refund is sought to be setoff and certify the amount of debt or debts owed by each such debtor.
(2) If a debtor identified by a claimant institution is determined by the department to be entitled to a refund of at least One Hundred Dollars ($100.00), the department shall transfer an amount equal to the refund owed, not to exceed the amount of the claimed debt certified, to the claimant institution. The Department of Revenue shall retain fifteen percent (15%) of the claimed debt as a collection fee. When the income tax refund owed exceeds the claimed debt, the department shall send the excess amount to the debtor within a reasonable time after such excess is determined.
(3) At the time of the transfer of funds to a claimant institution pursuant to subsection (2) of this section, the department shall notify the taxpayer or taxpayers whose refund is sought to be setoff that the transfer has been made. Such notice shall clearly set forth the name of the debtor, the manner in which the debt arose, the amount of the claimed debt, the transfer of funds to the claimant institution pursuant to subsection (2) of this section and the intention to setoff the refund against the debt, the amount of the refund in excess of the claimed debt, the taxpayer's opportunity to give written notice to contest the setoff within thirty (30) days of the date of mailing of the notice, the name and mailing address of the claimant institution to which the application for such a hearing must be sent, and the fact that the failure to apply for such a hearing, in writing, within the thirty-day period will be deemed a waiver of the opportunity to contest the setoff. In the case of a joint return or a joint refund, the notice shall also state the name of the taxpayer named in the return, if any, against whom no debt is claimed, the fact that a debt is not claimed against such taxpayer, the fact that such taxpayer is entitled to receive a refund if it is due him regardless of the debt asserted against his spouse, and that in order to obtain a refund due him, such taxpayer must apply in writing for a hearing with the claimant institution named in the notice within thirty (30) days of the date of the mailing of the notice. If a taxpayer fails to apply in writing for such a hearing within thirty (30) days of the mailing of such notice, he will have waived his opportunity to contest the setoff.
(4) Upon receipt of funds transferred from the department pursuant to subsection (2) of this subsection, the claimant institution shall deposit and hold such funds in an escrow account until a final determination of the validity of the debt.
SECTION 5. (1) When the claimant institution receives a protest or application in writing from a taxpayer within thirty (30) days of the notice issued by the department, the claimant institution shall set a date to hear the protest and give notice to the taxpayer by registered or certified mail of the date so set. The time and place of such hearing shall be designated in such notice and the date set shall not be less than fifteen (15) days from the date of such notice. If, at the hearing, the sum asserted as due and owing is found not to be correct, an adjustment to the claim may be made. The claimant institution shall give notice to the debtor of its final determination as provided in subsection (3) of this section.
(2) No issues shall be reconsidered at the hearing which have been previously litigated.
(3) If any debtor is dissatisfied with the final determination made at the hearing by the claimant institution, he may appeal the final determination to the circuit court of the county in which the debtor resides by filing notice of appeal with the claimant institution and with the clerk of the circuit court of the county to which the appeal shall be taken within thirty (30) days from the date notice of final determination was given by the claimant institution.
SECTION 6. (1) Upon final determination of the amount of the debt due and owing by means of a hearing or by the taxpayer's default through failure to comply with timely request for review, the claimant institution shall remove the amount of the debt due and owing from the escrow account and credit such amount to the debtor's obligation.
(2) Upon transfer of the debt due and owing from the escrow account to the credit of the debtor's account, the claimant institution shall notify the debtor in writing of the finalization of the setoff. Such notice shall include a final accounting of the refund which was setoff, including the amount of the refund to which the debtor was entitled prior to the setoff, the amount of the debt due and owing, the amount of the department's collection fee, the amount of the refund in excess of the debt which was returned to the debtor by the department, and the amount of the funds transferred to the claimant institution in excess of the debt determined to be due and owing at a hearing, if such a hearing was held. At such time, the claimant institution shall refund to the debtor the amount of the claimed debt originally certified and transferred to it by the department in excess of the amount of debt finally found to be due and owing.
SECTION 7. (1) The Department of Revenue may provide to a claimant institution all information necessary to accomplish and effectuate the intent of Sections 1 through 7 of this act.
(2) The information obtained by a claimant institution from the department in accordance with the provisions of Sections 1 through 7 of this act shall retain its confidentiality and shall only be used by a claimant institution in the pursuit of its debt collection duties and practices; and any employee or prior employee of any claimant institution who unlawfully discloses any such information for any other purpose, except as specifically authorized by law, shall be subject to the same penalties specified by law for unauthorized disclosure of confidential information by an agent or employee of the Department of Revenue.
SECTION 8. Section 27-7-83, Mississippi Code of 1972, is amended as follows:
27-7-83. (1) Returns and
return information filed or furnished under the provisions of this chapter
shall be confidential, and except in accordance with proper judicial order, as
otherwise authorized by this section, as authorized in Section 27-4-3 * * *, as authorized under Section 27-7-821
or as authorized under Section 7 of this act, it shall be unlawful for
the Commissioner of Revenue or any deputy, agent, clerk or other officer or
employee of the Department of Revenue or the Mississippi Department of
Information Technology Services, or any former employee thereof, to divulge or
make known in any manner the amount of income or any particulars set forth or
disclosed in any report or return required. The provisions of this section shall
apply fully to any federal return, a copy of any portion of a federal return,
or any information reflected on a federal return which is attached to or made a
part of the state tax return. Likewise, the provisions of this section shall
apply to any federal return or portion thereof, or to any federal return
information data which is acquired from the Internal Revenue Service for state
tax administration purposes pursuant to the Federal-State Exchange Program
cited at Section 6103, Federal Internal Revenue Code. The term "proper
judicial order" as used in this section shall not include subpoenas or
subpoenas duces tecum, but shall include only those orders entered by a court
of record in this state after furnishing notice and a hearing to the taxpayer and
the Department of Revenue. The court shall not authorize the furnishing of
such information unless it is satisfied that the information is needed to
pursue pending litigation wherein the return itself is in issue, or the judge
is satisfied that the need for furnishing the information outweighs the rights
of the taxpayer to have such information secreted.
(2) Returns and return information with respect to taxes imposed by this chapter shall be open to inspection by or disclosure to the Commissioner of the Internal Revenue Service of the United States, or the proper officer of any state imposing an income tax similar to that imposed by this chapter, or the authorized representatives of such agencies. Such inspection shall be permitted, or such disclosure made, only upon written request by the head of such agencies, or the district director in the case of the Internal Revenue Service, and only to the representatives of such agencies designated in a written statement to the Commissioner of Revenue as the individuals who are to inspect or to receive the return or return information on behalf of such agency. The Commissioner of Revenue is authorized to enter into agreements with the Internal Revenue Service and with other states for the exchange of returns and return information data, or the disclosure of returns or return information data to such agencies, only to the extent that the statutes of the United States or of such other state, as the case may be, grant substantially similar privileges to the proper officer of this state charged with the administration of the tax laws of this state.
(3) (a) The return of a person shall, upon written request, be open to inspection by or disclosure to:
(i) In the case of the return of an individual, that individual;
(ii) In the case of an income tax return filed jointly, either of the individuals with respect to whom the return is filed;
(iii) In the case of the return of a partnership, any person who was a member of such partnership during any part of the period covered by the return;
(iv) In the case of the return of a corporation or a subsidiary thereof, any person designated by resolution of its board of directors or other similar governing body, or any officer or employee of such corporation upon written request signed by any principal officer and attested to by the secretary or other officer;
(v) In the case of the return of an estate, the administrator, executor or trustee of such estate, and any heir at law, next of kin or beneficiary under the will, of the decedent, but only to the extent that such latter persons have a material interest which will be affected by information contained therein;
(vi) In the case of the return of a trust, the trustee or trustees, jointly or separately, and any beneficiary of such trust, but only to the extent that such beneficiary has a material interest which will be affected by information contained therein;
(vii) In the case
of the return of an individual or a return filed jointly, any claimant agency * * *, claimant local government or
claimant institution seeking to collect a debt through the setoff procedure
established in Sections 27-7-701 through 27-7-713, Sections 27-7-501 through 27-7-519 * * *, Sections 27-7-801 through 27-7-823
and/or Section 7 of this act, as the case may be, from an individual
with respect to whom the return is filed.
(b) If an individual described in paragraph (a) is legally incompetent, the applicable return shall, upon written request, be open to inspection by or disclosure to the committee, trustee or guardian of his estate.
(c) If substantially all of the property of the person with respect to whom the return is filed is in the hands of a trustee in bankruptcy or receiver, such return or returns for prior years of such person shall, upon written request, be open to inspection by or disclosure to such trustee or receiver, but only if the Commissioner of Revenue finds that such receiver or trustee, in his fiduciary capacity, has a material interest which will be affected by information contained therein.
(d) Any return to which this section applies shall, upon written request, also be open to inspection by or disclosure to the attorney-in-fact duly authorized in writing by any of the persons described in paragraph (a) of this subsection to inspect the return or receive the information on his behalf, subject to the conditions provided in paragraph (a).
(e) Return information with respect to any taxpayer may be open to inspection by or disclosure to any person authorized by this subsection to inspect any return of such taxpayer if the Commissioner of Revenue determines that such disclosure would not seriously impair state tax administration.
(4) The State Auditor and the employees of his office shall have the right to examine only such tax returns as are necessary for auditing the Department of Revenue, and the same prohibitions against disclosure which apply to the Department of Revenue shall apply to the State Auditor and his employees or former employees.
(5) Officers and employees of the Mississippi Development Authority who execute a confidentiality agreement with the Department of Revenue shall be authorized to discuss and examine information to which this section applies at the offices of the Mississippi Department of Revenue. This disclosure is limited to information necessary to properly administer the programs under the jurisdiction of the Mississippi Development Authority. The Department of Revenue is authorized to disclose to officers and employees of the Mississippi Development Authority who execute a confidentiality agreement the information necessary under the circumstances. The same prohibitions against disclosure which apply to the Department of Revenue shall apply to the officers or employees of the Mississippi Development Authority.
(6) Information required by the University Research Center to prepare the analyses required by Sections 57-13-101 through 57-13-109 shall be furnished to the University Research Center upon request. It shall be unlawful for any officer or employee of the University Research Center to divulge or make known in any manner the amount of income or any particulars set forth or disclosed in any information received by the center from the Department of Revenue other than as may be required by Sections 57-13-101 through 57-13-109 in an analysis prepared pursuant to Sections 57-13-101 through 57-13-109.
(7) Information required by the Mississippi Development Authority to prepare the reports required by Section 57-1-12.2 shall be furnished to the Mississippi Development Authority upon request. It shall be unlawful for any officer or employee of the Mississippi Development Authority to divulge or make known in any manner the amount of income or any particulars set forth or disclosed in any information received by the Mississippi Development Authority from the Department of Revenue other than as may be required by Section 57-1-12.2 in a report prepared pursuant to Section 57-1-12.2.
(8) Information necessary to comply with Chapter 13, Title 85, may be furnished to financial institutions. It shall be unlawful for any officer or employee of the financial institution to divulge or make known in any manner the amount of income or any particulars set forth or disclosed in any information received by the financial institution from the Department of Revenue other than as may be authorized by Chapter 13, Title 85.
(9) Nothing in this section shall be construed to prohibit the publication of statistics, so classified as to prevent the identification of particular reports or returns and the items thereof, or the inspection by the Attorney General, or any other attorney representing the state, of the report or return of any taxpayer who shall bring action to set aside the tax thereon, or against whom any action or proceeding has been instituted to recover any tax or penalty imposed.
(10) Nothing in this section shall prohibit the commissioner from making available information necessary to recover taxes owing the state pursuant to the authority granted in Section 27-75-16.
(11) Reports and returns required under the provisions of this chapter shall be preserved in accordance with approved records control schedules. No records, however, may be destroyed without the approval of the Director of the Department of Archives and History.
(12) The Department of Revenue is authorized to disclose to the Child Support Unit and to the Fraud Investigation Unit of the Department of Human Services without the need for a subpoena or proper judicial order the name, address, social security number, amount of income, source of income, assets and other relevant information, records and tax forms for individuals who are delinquent in the payment of any child support as defined in Section 93-11-101 or who are under investigation for fraud or abuse of any state or federal program or statute as provided in Section 43-1-23.
(13) Nothing in this section shall prohibit the Department of Revenue from exchanging information with the federal government that is necessary to offset income tax refund payment on debts owed to this state or the United States.
(14) Nothing in this section shall prohibit the department from making available information that is necessary to be disclosed for the administration and enforcement of Section 27-7-87.
SECTION 9. This act shall take effect and be in force from and after January 1, 2021, and shall stand repealed on December 31, 2020.