2023 Delaware Code › Title 30 - State Taxes › Chapter 5. PROCEDURE, ADMINISTRATION AND ENFORCEMENT › Subchapter III. Procedure and Administration › § 545. Collection of debts owed to certain State agencies.

§ 545. Collection of debts owed to certain State agencies.
(a) General. — Upon receiving notice from any claimant agency that a taxpayer owes a debt to such agency, the Director shall:
(1) Reduce the amount of any overpayment of tax payable to the taxpayer, during a period not to exceed 12 months from the date of the receipt of said notice, by the amount of such debt or unpaid portion thereof;
(2) Notify the taxpayer that such overpayment has been reduced by the amount of such reduction;
(3) Pay the amount by which such overpayment is reduced under paragraph (a)(1) of this section to such agency in an order of priority as determined by the Director of Revenue;
(4) Pay to the taxpayer the remainder of such overpayment, if any; and
(5) Notify the Director of the Lottery to pay to the Director of Revenue any prize payable where prizes exceed a threshold established by the Director of the Lottery to a taxpayer who is also a lottery winner, and the Director of the Lottery shall:
a. Reduce the prize payable to the winner by the amount of such debt or unpaid portion thereof;
b. Notify the winner that such prize has been reduced by the amount of such reduction;
c. Pay the amount by which such prize is reduced under paragraph (a)(5)a. of this section to the claimant agency; and
d. Pay to the winner the remainder of such prize, if any.
(b) Definitions. — For purposes of this section:
(1) “Claimant agency” means:
a. Any department or agency of the State, including the University of Delaware, Delaware State University and Delaware Technical and Community College, with respect to any debt owed to it and any political subdivision or school district of this State, with respect to property taxes owed to it; and
b. Any court, office of the court clerk, prothonotary, or Register in Chancery of this State with respect to fines, court costs, assessments and/or restitution.
(2) “Debt” means any liquidated sum which is past due, is legally enforceable and has accrued through contract, subrogation, tort, court assessment or operation of law, whether or not there is an outstanding judgment of such sum, plus, if so agreed between the Director and the claimant agency, the amount of the reimbursement provided in paragraph (c)(1)e. of this section.
(3) “Lottery winner” means any person who is entitled to a payment on account of winning a prize in a lottery conducted pursuant to the provisions of Chapter 48 of Title 29.
(4) “Taxpayer” means any person or entity identified by a claimant agency for action by the Director of Revenue under this section.
(c) Regulations. — (1) The Director shall promulgate regulations providing for:
a. Procedures and methods to be employed by a claimant agency with respect to the operation of this section;
b. Due notice to the taxpayer (and, in the case of an overpayment of the tax imposed by Chapter 11 of this title, any spouse with whom the taxpayer files a joint return) of the reduction in the overpayment and of the opportunity, upon request, for a hearing before the claimant agency prior to such reduction;
c. Safeguards against the disclosure or inappropriate use of any personally identifiable information regarding the taxpayer obtained or maintained pursuant to this chapter;
d. A minimum debt, amounts below which, in light of administrative expenses and efficiency, shall, in the Director's discretion, not be subject to the collection procedures set forth in this section; and
e. Reimbursement by the claimant agency to the Director of (or reduction in the amount payable to the claimant agency by the Director under subsection (a) of this section by an amount equal to) all costs, direct and indirect, determined on a statistical or actual basis, of effectuating the collection procedures set forth in this section.
(2) Regulations promulgated under the authority of this subsection shall have the force and effect of law.
(d) Remedy not exclusive. — The collection procedures prescribed by this section are in addition to, and not in substitution for, any other remedy available by law.
(e) Joint and combined income tax returns. — (1) If a refund from which the reduction described in paragraph (a)(1) of this section would be made is based upon a joint return of the tax imposed by Chapter 11 of this title, the Director shall:
a. Notify each taxpayer filing such return that the reduction is being made from a refund based upon such return;
b. Include in such notification a description of the right of the nondebtor taxpayer to file a written protest with the Director, within 30 days of the date of mailing such notification, for the purpose of showing the nondebtor taxpayer's proper share of such refund; and
c. If such a showing is made, promptly remit to the nondebtor taxpayer the nondebtor taxpayer's proper share of such refund, and apply the balance of such refund in the manner prescribed in subsection (a) of this section.
(2) In the event the debtor shall be due a refund in combination with a nondebtor by virtue of having filed separately but combined on 1 return of the tax imposed by Chapter 11 of this title, the Director shall regard each spouse as entitled to separate refunds based upon the taxes due and prior payments of each spouse individually. In such a case, the reduction described in paragraph (a)(1) of this section shall not be applicable to such separate refund due to the nondebtor spouse, but such reduction shall be applicable to such separate refund due to the debtor spouse.
(f) Review of reductions. — No court of this State shall have jurisdiction to hear any action, whether legal or equitable, brought to restrain or review a reduction authorized by subsection (a) of this section. Except as otherwise provided in subsection (e) of this section, no such reduction shall be subject to review by the Director in any administrative proceeding. No action brought against this State to recover the amount of any such reduction shall be considered to be a suit for a refund of tax. This subsection shall not be deemed to preclude:
(1) A prior hearing, upon request of the taxpayer, before the claimant agency as set forth in paragraph (c)(1)b. of this section; or
(2) Any legal, equitable or administrative action against the claimant agency after payment to it of such reduction.
(g) Director of Lottery. — When the Director of Revenue shall notify the Director of Lottery pursuant to the provisions of subsection (a) of this section of a debt owed by a taxpayer, and said taxpayer is also a lottery winner, the Director of Lottery shall pay over to the Director of Revenue any prize then payable or becoming payable to said taxpayer, until such time as the Director of Revenue notifies the Director of Lottery that the debt of said taxpayer has been discharged. The Director of Lottery shall maintain a current log of the names and other identification provided by the Director of Revenue of persons owing a debt to a claimant agency.
(h) In addition to the authority set forth in other subsections of this section, the Director may, in the Director's discretion, enter into an agreement with claimant agencies under which the Director shall be authorized to use the Division's agents and employees to collect debts owed to the claimant agency under the same laws, regulations and provisions applicable to the claimant agency and in the same manner as the claimant agency less the amount of reimbursement for the Division of Revenue's cost as may be agreed between the Director and the claimant agency.
68 Del. Laws, c. 187, §  1;  68 Del. Laws, c. 342, §  1;  69 Del. Laws, c. 402, §§  1-4;  70 Del. Laws, c. 186, §  1;  70 Del. Laws, c. 425, §  115;  71 Del. Laws, c. 330, §  1;  80 Del. Laws, c. 208, § 1;