Current through all regulations passed and filed through September 16, 2024
(A) This rule describes the federal tax
offset adjustment process. There are certain circumstances, including invalid
offsets, that require a federal income tax refund offset to be returned to the
taxpayer (who may or may not be the obligor). This is accomplished either
through a federal adjustment or a state payment.
(B) A federal adjustment may occur as a
result of a number of circumstances, which include but are not limited to when:
(1) An injured spouse claim is filed with the
internal revenue service (IRS) and the injured spouse is entitled to a portion
or all of the federal tax refund;
(2) The obligor files an amended federal
income tax return and the amount available for offset is reduced; or
(3) The obligor files a federal income tax
return using an incorrect social security number.
(C) The child support enforcement agency
(CSEA) shall be required to issue a state payment to the taxpayer when:
(1) The CSEA receives a federal tax refund
offset in an amount greater than the arrears amount that was last accepted by
the federal office of child support enforcement;
(2) An obligor was submitted but did not meet
the federal tax offset submission criteria;
(3) An obligor was submitted with an
incorrect arrears amount;
(4) An
obligor was submitted using an incorrect social security number;
(5) An income tax refund offset review was
conducted that resulted in a decrease in the arrears amount and the offset
occurred before the update was processed; or
(6) The obligor paid the arrears below the
threshold after the tax offset occurred but prior to disbursement of the tax
offset amount.
(D) The
federal adjustment process.
(1) When there is
a federal tax offset adjustment, the tax offset collection is returned to the
obligor and the bureau of fiscal services (BFS) reduces the amount of the tax
offset that was previously disbursed to the state.
(2) Injured spouse claims.
(a) When the IRS determines that an injured
spouse is entitled to a portion or all of the federal tax refund, the IRS sends
the refund directly to the injured spouse. When a refund is sent to an injured
spouse via electronic funds transfer to a closed account, the amount due the
injured spouse will be reversed by BFS.
(b) The CSEA may delay distribution of the
federal tax offset collection received as the result of a joint return until it
is notified by the IRS that the injured spouse has received the proper share of
the refund, or for six months, whichever is earlier.
(E) The state payment process.
(1) When a CSEA issues a state payment to an
obligor, it shall report the state payment to the office of child support (OCS)
within the Ohio department of job and family services (ODJFS) immediately but
no later than five days from the date the payment is made using the JFS 07017
"Update of IRS Tax Refund Offset Submittal"
(effective or revised effective date as identified in rule
5101:12-50-99
of the Administrative Code).
(2)
When the CSEA issues a state payment to an obligor and submits a JFS 07017 for
that state payment, and then an additional state payment is made to that
obligor for the same processing year, the CSEA shall submit a second JFS 07017
and report the total year-to-date amount for the processing year on the second
JFS 07017.
(3) The CSEA shall
include the processing year in the report of a state payment.
(F) Recovery of disbursed federal
tax offset collection.
(1) When a federal
adjustment is made on a collection that has been disbursed to assigned arrears,
the disbursed collection shall be recovered from ODJFS.
(2) When a federal adjustment is made on a
collection that has been disbursed to the obligee or an alternate payee, the
CSEA shall recover the disbursed collection using one or both of the following
options:
(a) The CSEA may recover the
collection from the obligee or the alternate payee through the recoupment
process described in rule 5101:12-80-05.6 of the Administrative Code.
(b) The CSEA may recover a collection
disbursed to the obligee or alternate payee from the obligor by establishing an
account for the case within the support enforcement tracking system (SETS)
payable to the CSEA to recover the amount. When the CSEA establishes the
account, the following shall apply:
(i) The
CSEA shall use the "OTHER FEES NO PMT/ IRS ADJ REIMB" account in SETS where
collections will allocate below all other support obligations in the allocation
hierarchy. The account shall include any subsequent adjustment for which the
CSEA uses this method of recovery;
(ii) The balance of the account shall not
increase the total arrears owed by the obligor; and
(iii) The balance added to the account shall
not exceed the amount expended by the CSEA and disbursed to the obligee or the
alternate payee as support.
When the CSEA chooses to use the option described in paragraph
(F)(2)(b) of this rule but doing so would increase the total arrears owed by
the obligor on the case, the CSEA must instead use a combination of the options
described in paragraphs (F)(2)(a) and (F)(2)(b) of this rule, or in the
alternative must use the option described in paragraph (F)(2)(a) of this rule
exclusively. The total combined amount of the balances created as a result of
using the options described in paragraphs (F)(2)(a) and (F)(2)(b) of this rule
shall not exceed the amount disbursed to the obligee or alternate payee.
The CSEA shall be responsible to track any account or accounts
established pursuant to paragraph (F)(2) of this rule to ensure recovery of
funds that have been disbursed to the obligee or alternate payee.
(3) When a
CSEA has issued a state payment to a taxpayer in accordance with paragraph (C)
of this rule but a federal adjustment subsequently occurs against the original
tax offset collection that led to the state payment, the CSEA shall recover the
state payment through the recoupment process described in rule 5101:12-80-05.6
of the Administrative Code.
Effective: 4/1/2018
Five Year Review
(FYR) Dates: 1/1/2021
Promulgated Under:
119.03
Statutory
Authority: 3123.81,
3125.25
Rule
Amplifies: 3123.81,
3125.03,
3125.25.
Prior
Effective Dates: 11/09/1981, 06/10/1982 (Emer.), 09/13/1982, 05/01/1986
(Emer.), 07/20/1986, 11/01/1986, 12/20/1988, 03/18/1989, 08/09/1990,
04/01/1991, 11/01/1991, 07/01/1992, 02/11/1993, 09/01/1994, 11/01/1994,
01/01/1996, 08/01/1998, 05/01/2001, 04/11/2003, 07/01/2006, 10/01/2010,
01/01/2016
