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State of Iowa
Offset Program
Department of Administrative Services State Accounting Enterprise
Offset Program
-Overview
-Participation
-Vendor Offsets
-Tax Offsets
-Questions
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City Participation
What does the Offset Program do? The State of Iowa recovers delinquent payments owed to state government and local governments.
It is accomplished by “offsetting” (withholding) money from various sources, as allowed by the Code of Iowa, of individuals and vendors.
This program is a cost-effective method to ensure individuals in debt to government make payments on their debt, so the burden isn’t passed on to the taxpayers. 3
Function of the Offset Program
Code of Iowa Authority
Section 8A.504 of the Code of Iowa directs the establishment of a procedure to set off against any claim owed to a person (from a state agency) any liability that person owed to a state agency.
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State Agency
“State Agency” is defined as: A board, commission, department, or other administrative office or unit of the State of Iowa Any other state entity reported in the Iowa Comprehensive Annual Financial Report (CAFR) Any political subdivision of the state, or an office or unit of a political subdivision
Offset Timeline
Early 1970s Iowa Department of Revenue & Finance holds income tax refunds for liabilities owed to its department
Late 1970s income tax refunds allowed to be held for other state agencies
In 1989 the program was expanded to payments issued to vendors
In 2006 legislation was approved to allow casino winnings to be offset
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Participating Agencies
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61 State Agencies 3 Universities Internal Revenue Service 99 County Clerks of Court 13 Counties 225 Cities 13 Community Colleges 59 Municipal Utilities 13 Housing Authorities
Vendor Offsets
Memorandum of Understanding
A Memorandum of Understanding (MOU) must be signed and submitted to:
Department of Administrative Services State Accounting Enterprise
We must receive signatures Faxed MOU’s are not accepted
To obtain an MOU, contact the Offset Program at [email protected]
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original
Appeal Process Prior to submitting the MOU, contact your legal counsel to discuss how your city will conduct the Appeal Process.
When a debtor appeals owing a debt or the amount of the debt, remember:
Your city is responsible for conducting the appeal.
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Identifying Debt
Debt is identified by matching a Social Security Number or Federal Employer Tax Identification Number (provided by the city) against Social Security and Federal Tax ID numbers used by the State of Iowa to issue payments.
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Qualifying Debt
“Liability” or “debt” means any liquidated sum due and owing to the State of Iowa or any state agency which has accrued through contract, subrogation, tort, operation of law, or any legal theory regardless of whether there is an outstanding judgment for that sum. Before setoff, the amount of a person’s liability
to a state agency shall be at least
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$50.
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Sources of Offset Funds
Nearly all payments made by the State of Iowa are subject to offset…
Tax Refunds Vendor payments for Goods and Services Casino Winnings Lottery Winnings Great Treasure Hunt payments
Offset Program Participation
Duties of the Agency
1. Agency must provide list of debtors
2. Agency must notify DAS immediately of any change in the status of the debt
3. Agency must certify the file to DAS semi-annually
4. Agency must send notification to the debtor within ten calendar days from the date which the agency was notified
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Offset Notification Letter
The Notification Letter must include the following:
1. City’s right to the payment in question 2. City’s right to recover the payment through this
offset procedure 3. Basis of the city’s case in regard to this debt 4. Tax Offset Only - Right of the debtor to request
a split of the payments between parties when the payment in question is jointly owned or otherwise owned by two or more people
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Offset Notification Letter Continued
5. Debtor’s right to appeal the offset 6. Your city’s appeal process procedure 7. Specific number of days debtor has to respond
to the notification letter 8. City name and phone number for debtor to
contact with questions
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Priority of Offsetting Agencies 1.Department of Revenue 2.Child Support (Dept. Human Services)
3.Judicial Branch 4.College Aid 5.Overpayments (DIA/DHS)
6.All Other Debts - Prioritized based on the liability date provided by the offsetting agency
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Tax Offsets
Tax Matches Example of Tax Matches
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Offset
257
407
0 Release
Include $7.00 fee in offset amount
67 + 7 =
Enter the total offset. Nothing else!
Tax Offset Screen
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Notification to City of Offset Match
When a city receives notification of a match, it is the city’s responsibility to convey the action for each match to the Offset Program.
OFFSETTING AGENCY
HOLD THOSE FUNDS!
150.00 + 7.00 = 157.00
What to do?
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Confidential Information
Transmit offset action instructions by fax.
The State of Iowa does not consider email secure; do not email confidential information except when using SecureMail.
For example, Social Security Numbers 24
Requirements for Participation
Offsetting City Must: 1. Sign MOU agreement with Dept. of Admin Services 2. Confirm debtor has minimum debt not less than $50 3. Make a good faith attempt to collect the debt 4. Provide debtor file to Department of Admin Services
- Information Technology Enterprise 5. Provide & keep current: Name of contact person,
Phone and Fax numbers, Email address and City FEIN 6. Notify vendor/taxpayer of offset through a notification
letter that includes your city’s appeal process and other required information 25
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das.sae.iowa.gov/offsets
Offset Program Held Payments -Agency Contacts Participant Info
Additional information is on
our website!
Offset Team Contacts Peggy (515) 281-6649 Martha (515) 281-5202 Lynn (515) 281-5459
Offset Email [email protected]
Individuals sometimes become upset with the Offset Team… Please don’t share our last names!
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