Current through Register Vol. 50, No. 6, December 1, 2023
RELATES TO:
KRS
131.670,
131.672,
131.674,
131.676,
205.772,
205.774
NECESSITY, FUNCTION, AND CONFORMITY:
KRS
131.672(7) requires the
Department of Revenue to promulgate an administrative regulation to establish
the procedures to be followed by the Department of Revenue and Kentucky
financial institutions in implementing and operating a data match and levy
system to assist the Department of Revenue in collecting delinquent taxes and
debts owed to the Commonwealth. This administrative regulation establishes the
electronic data match and levy procedures.
Section
1. Definitions.
(1) "Debt" is
defined by
KRS
131.670(1).
(2) "Debtor" is defined by
KRS
131.670(2).
(3) "Delinquent taxpayer" is defined by
KRS
131.670(4).
(4) "Department" is defined by
KRS
131.670(3).
(5) "Financial Institution" is defined by
KRS
131.670(5).
(6) "Levy" is defined in
KRS
131.500(10).
Section 2. Electronic Data Match and Levy
Program Implementation. The department shall have access to identifying
information for a delinquent taxpayer or debtor who the department has
identified to a financial institution through a data match for the purpose of
levying the account of the delinquent taxpayer or debtor to pay the delinquent
tax or debt.
Section 3. Electronic
Data Match Reporting. A financial institution shall:
(1) Select a preferred matching method in the
Data Matching Memorandum of Agreement;
(2) Exchange information with the department
by way of an automated data exchange system. If the financial institution
demonstrates to the department that it does not have the necessary computer
capabilities to exchange information by way of an automated data exchange
system, the department may issue a waiver to allow the financial institution to
exchange information by paper;
(3)
Submit information to the department on a quarterly basis in the format
prescribed by the Financial Data Match Specifications Handbook, using either
the all accounts method or matched accounts method.
(a) If a financial institution agrees to
provide the information according to the all accounts method, the financial
institution shall:
1. Submit to the
department, or the department's authorized agent, within fifteen (15) days
after requested by the department, data files of open accounts for the data
match; and
2. Report the name,
record address, Social Security number, Federal Employer Identification number,
and account status on any account maintained by the financial
institution;
(b) If a
financial institution agrees to provide the information according to the
matched accounts method, the financial institution shall, within fifteen (15)
days after submission to the financial institution by the department of an
inquiry, file:
1. Match the inquiry file of
delinquent taxpayers and debtors identified and provided by the department, or
by the department's authorized agent, against open accounts maintained by the
financial institution; and
2.
Submit a report of matched accounts to the department or its authorized agent
containing the name, record address, Social Security number, Federal Employer
Identification number, and account status on any account maintained by the
financial institution;
(4) Maintain a security process to assure
that information received from the department or its authorized agent
concerning a delinquent taxpayer or debtor shall:
(a) Be maintained and safeguarded as
confidential; and
(b) Not be copied
or given to any other entity without the written permission of the department,
or the delinquent taxpayer or debtor; and
(5) Incur no liability for providing a file
to the department in accordance with an approved format as described by the
Financial Data Match Specifications Handbook.
Section 4. Levy.
(1) If a financial data match occurs, a
financial institution shall:
(a) Hold,
encumber or surrender an account to the department upon receipt of a Notice of
Levy, Revenue Form 12B020, which is incorporated by reference in
103 KAR
3:010, Section 2(1)(rr);
(b) Address and send to the department
notices, paperwork, tapes or other electronic communication resulting from a
financial institution data match program; and
(c) Submit the date files required by Section
3 of this administrative regulation to the department.
(2) The match of an account holder to a
delinquent taxpayer or debtor record provided by the department shall not
constitute a levy. An account shall not be held, encumbered, or surrendered to
the department without a financial institution having received a notice of levy
from the department.
Section
5. Incorporation by Reference.
(1) The following material is incorporated by
reference:
(a) "Data Matching Memorandum of
Agreement", July 2008; and
(b)
"Financial Data Match Specifications Handbook", edition 11/07.
(2) This material may be
inspected, copied, or obtained, subject to applicable copyright law, at the
Department of Revenue, Division of Collections, 501 High Street, 8th Floor,
Frankfort, Kentucky 40620, Monday through Friday, 8 a.m. to 5 p.m.
35 Ky.R. 675;
1435; eff. 1-5-2009; Crt eff. 6-7-2019; TAm eff.
4-2-2021.
STATUTORY AUTHORITY:
KRS
131.672(7)