AG 2002 01 28 (Regular) - Laserfiche WebLink

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I North Carolina Association of County Commissioners North Carolina League of Municipalities I I I I To: From: Date: Subject: County Managers City Managers/Clerks C. Ronald Aycock, NCACC Executive Director S. Ellis Hankins, NCLM Executive Director November 9, 2001 NC Local Government Debt Setoff Clearinghouse to Enable Counties and Cities to Participate in State Tax Refund Debt Setoff Program Training to be held November 27, City of Hickory Council Chambers (76 N. Center Street),. & November 29, City of Wilson Council Chambers (112 N. GoldsborO Street), both sessions from 1:00 p.m.- 4:00 'p.m. I State law requires priorities of setOff be established based on date of delinquent debt subtnission--e.g, first in, first paid I I During the 1997 General Assembly session, the North Carolina Association of County Commissioners and the North Carolina League of Municipalities were successful in having enacted a legislative goal enabling counties and .cities to participate in the state's income tax debt setoff program. The program permits counties and cities to submit any outstanding delinquent debt ($50 or more) through a local government clearinghouse to the NC Department of Revenue, to attempt to match these debts against individual income tax refunds. The local government clearinghouse is also charged with disbursing offset funds back to the receiving county and/or city. NCACC and NCLM have organized a joint NC Local Government Debt Setoff Clearinghouse to make this program available to all North Carolina counties and cities. NCGS 105A authorizes-county and city participation in the debt setoff program through a clearinghouse function, and limits clearinghouse participation to only counties and cities. Delinquent debt is a sum that is at least $50 owed to a county or city (claimant agency) that has accrued through contract, subrogation, tort, operation of law, or any other legal theory regardless of whether there is an outstanding judgment for the sum. Furthermore, we are requiring that a full 60 days must lapse after a local government labels the debt as delinquent before the debt can be submitted to the clearinghouse. The county or city must furnish the full name and social security number of each debtor. This program will handle tax refUnds beginning with the 2001 tax year, and additional information will be provided in the near future to establish the initial date for submission. Due to priority handling of debts, we recommend that participating units begin assembling debt information immediately and initiate the required notification and appeals processes. Cost of participation will-be $15 for each successful match of debt against an individual debtor's tax refund. No charges will accrue unless a successful tax refund setoff is made. The $15 cannot be charged to the debtor but must be paid by the participating county or city. NCACC and NCLM have contracted with Five Star Computing, Inc., Columbia, SC to administer the program. Five Star Computing will receive, process and submit the consolidated debts to the North Carolina Department of Revenue, and has established a call center to handle telephone calls from taxpayers who have had their refunds withheld, in whole or in part. Five Star will also be submitting successful match information back to the