2023 Wisconsin Statutes & Annotations › Chapter 71 - Income and franchise taxes for state and local revenues. › 71.93 - Setoffs for other state agencies.

71.93
Setoffs for other state agencies.
(1)
Definitions. In this section:
(a)
“Debt" means all of the following:
1.
An amount owed to a state agency, if the amount has been reduced to a judgment or if the state agency has provided the debtor reasonable notice and an opportunity to be heard with regard to the amount owed.
2.
A delinquent child support or spousal support obligation that has been reduced to a judgment and has been submitted by an agency of another state to the department of children and families for certification under this section.
3.
An amount that the department of health services may recover under s. 49.45 (2) (a) 10., 49.497, 49.793, or 49.847, if the department of health services has certified the amount under s. 49.85.
4.
An amount that the department of children and families may recover under s. 49.138 (5), 49.161, or 49.195 (3) or collect under s. 49.147 (6) (cm), if the department of children and families has certified the amount under s. 49.85.
5.
An amount owed to the department of corrections under s. 304.074 (2).
6.
An amount owed to the department of military affairs under s. 321.40 (5).
7m.
An amount owed pursuant to an order under s. 973.20 (1r), if the department of corrections has certified the amount under s. 973.20 (10) (b).
8.
Any amount owed to a state agency and collected pursuant to a written agreement between the department of revenue and the state agency as provided under sub. (8) (b), if the debt has been reduced to a judgment or if the state agency or the department has provided the debtor reasonable notice and an opportunity to be heard with regard to the amount owed.
(b)
“Debtor" means any person owing a debt to a state agency and any person who owes a delinquent child support or spousal support obligation to an agency of another state.
(c)
“Department" means the department of revenue.
(cm)
“Disbursement" means any payment to a person who provides goods and services to the state under subch. IV or V of ch. 16 or under ch. 84.
(d)
“Refund" means any of the following:
1.
The excess amount by which any payments, refundable credits, or both exceed a debtor's Wisconsin tax liability or any other liability owed to the department.
2.
The amount owed to a debtor under s. 177.0905 for the return of abandoned property under subch. IX of ch. 177 which exceeds a debtor's Wisconsin tax liability or any other liability owed to the department.
(e)
“State agency" has the meaning set forth under s. 20.001 (1).
(2)
Certification. A state agency may certify to the department any properly identified debt exceeding $20 so that the department may set off the amount of the debt against a refund to the debtor or so that the department of administration may reduce a disbursement to the debtor by the amount of the debt. At least 30 days prior to certification each debtor shall be sent a notice by the state agency of its intent to certify the debt to the department for setoff or reduction and of the debtor's right of appeal. At the time of certification, the certifying state agency shall furnish the social security number of individual debtors and the federal employer identification number of other debtors.
(3)
Administration.
(a)
The department of revenue shall setoff any debt or other amount owed to the department, regardless of the origin of the debt or of the amount, its nature or its date. The department's setoff shall include the use of unclaimed property owed to the debtor under s. 177.0505, 177.0605 (12), 177.0905 (2), or 177.0906 (2). If after the setoff there remains a refund in excess of $10, the department shall set off the remaining refund against certified debts of other entities in the following order:
1.
Debt under s. 49.855 (1), certified by the department of children and families under sub. (2).
1m.
Debt certified under s. 973.20 (10) (b).
2.
State agency debt collected pursuant to an agreement under sub. (8) and debt owed to the courts, the legislature, or an authority, as defined in s. 16.41 (4), collected pursuant to an agreement under sub. (8).
3.
Debt owed to local units of government collected pursuant to an agreement under sub. (8).
4.
Debt certified under sub. (2), other than child support debt certified by the department of children and families.
5.
Child support or spousal support obligations submitted by an agency of another state.
6.
Debt certified under s. 71.935 (2).
7.
Federal tax obligations collected pursuant to an agreement under s. 73.03 (52) (a).
8.
Tribal obligations collected pursuant to an agreement under s. 73.03 (52n).
9.
Tax and nontax obligations of other states, and of the local governmental units within those states, collected pursuant to an agreement under s. 73.03 (52m).
(am)
If more than one certified debt exists for any debtor for the same type of debt specified under par. (a) 1. to 9., the refund shall be first set off against the earliest debt certified, except that no child support or spousal support obligation submitted by an agency of another state may be set off until all debts owed to and certified by state agencies of this state have been set off. When all debts have been satisfied, any remaining refund shall be refunded to the debtor by the department. Any legal action contesting a setoff under this paragraph shall be brought against the entity that certified the debt.
(b)
The department shall provide the information obtained under sub. (2) to the department of administration. Before reducing any disbursement as provided under this paragraph, the department of administration shall contact the department to verify whether a certified debt that is the basis of the reduction has been collected by other means. If the certified debt remains uncollected, the department of administration shall reduce the disbursement by the amount of the debtor's certified debt under sub. (2), notify the department of such reduction and disbursement, and remit the amount of the reduction to the department in the manner prescribed by the department. If more than one certified debt exists for any debtor, the disbursement shall be reduced first by any debts certified under s. 73.12 then by the earliest debt certified. Any legal action contesting a reduction under this paragraph shall be brought against the state agency that certified the debt under sub. (2).
(c)
No person has any right to, or interest in, any overpayment, refundable credit, or refund, including any interest allowed, under this chapter until setoff under this section and ss. 49.855 and 71.935 has been completed.
(4)
Settlement. Within 30 days after the close of each calendar quarter, the department shall settle with each state agency that has certified a debt. Each settlement shall note the opening balance of debts certified, any additions or deletions, reductions or amounts set off, and the ending balance at the close of the settlement period.
(5)
Debtor charged for costs. Each debtor shall be charged for administration expenses, and the amounts charged shall be credited to the department's appropriation under s. 20.566 (1) (h). The department may set off amounts charged to the debtor under this subsection against any refund owed to the debtor, in the manner provided in sub. (3). Annually on or before November 1, the department shall review its costs incurred during the previous fiscal year in administering state agency setoffs and reductions and shall adjust its subsequent charges to each debtor to reflect that experience.
(6)
Written agreement and authority of department. Any state agency wishing to certify debts to the department shall enter into a written agreement with the department prior to any certification of debt. Any certification of debts by a state agency or changes to certified debts shall be in a manner and form prescribed by the department. The secretary of revenue shall be the final authority in the resolution of any interagency disputes in regard to certification of debts. If a refund or disbursement is adjusted after a setoff or reduction, the department may readjust any erroneous settlement with a certifying state agency.
(7)
Exchange of information. Information relative to changes to any debt certified shall be exchanged promptly by each agency. Setoff of refunds and reduction of disbursements against debts certified by agencies, and any report of the setoff or reduction to state agencies, is not a violation of ss. 71.78, 72.06, 77.61 (5), 78.80 (3), and 139.38 (6).
(8)
State agency debt agreements.
(a)
Upon request by a state agency, the department of revenue may enter into an agreement with individuals who owe debts to the state agency. With the consent of the debtor, the department of revenue may arrange with the debtor's employer for the withholding from the debtor's pay of a specified amount to be applied against the debt.
(b)
1.
Except as provided in subd. 2., a state agency and the department of revenue shall enter into a written agreement to have the department collect any amount owed to the state agency that is more than 90 days past due, unless any of the following applies:
a.
Negotiations between the agency and debtor are actively ongoing.
b.
The debt is the subject of legal action or administrative proceedings.
c.
The agency determines that the debtor is adhering to an acceptable payment arrangement.
d.
The debt is an amount owed under ch. 108 or under a federal unemployment benefit program administered by the department of workforce development.
1m.
At least 30 days before the department pursues the collection of any debt referred by a state agency, either the department or the agency shall provide the debtor with a written notice that the debt will be referred to the department for collection. The department may collect amounts owed, pursuant to the written agreement, from the debtor in addition to offsetting the amounts as provided under sub. (3). The department shall charge each debtor whose debt is subject to collection under this paragraph a collection fee and that amount shall be credited to the appropriation under s. 20.566 (1) (h).
2.
The department may enter into agreements described under subd. 1. with the courts, the legislature, authorities, as defined in s. 16.41 (4), and local units of government.
3.
Agreements required under subd. 1. shall be completed no later than July 1, 2010, except that an agreement may allow a delay or phase-in of referrals.
4.
The secretary of revenue may waive the referral of certain types of debt. The department's determination that a debt is not collectable does not prevent the referring agency from taking additional collection actions.
5.
The department may collect debts and assess interest on delinquent amounts under this paragraph in the same manner that it collects taxes and assesses interest under ss. 71.82 (2), 71.91, 71.92, and 73.03 (20). The department's use of tax returns and related information to collect debts under this paragraph is not a violation of s. 71.78, 72.06, 77.61 (5), 78.80 (3), or 139.38 (6).
6.
If the debtor owes debt to the department and to other entities, payments shall first apply to debts owed to the department then to the other entities in the order determined under sub. (3) (a).
History: 1987 a. 312; 1989 a. 31; 1993 a. 437; 1995 a. 27 ss. 3427 to 3429, 9126 (19), 9130 (4); 1995 a. 404; 1997 a. 3, 27; 2001 a. 16; 2003 a. 33; 2005 a. 25, 59, 254; 2007 a. 20 ss. 2141 to 2142, 9121 (6) (a); 2007 a. 97, 200; 2009 a. 28; 2013 a. 20, 308; 2015 a. 55, 355; 2021 a. 87, 231.