Okla. Stat. tit. 68, § 68-205.2

courts, or public housing authorities against state income tax

refunds.

A. For purposes of this section, a “qualified entity” shall

mean a:

1. State agency;

2. Municipal court;

3. District court;

4. Public housing authority operating pursuant to Section 1062

of Title 63 of the Oklahoma Statutes;

5. District attorney seeking to collect unpaid court-ordered

monetary obligations; or

6. The designee of an entity described in paragraphs 1 through

5 of this subsection.

B. A qualified entity seeking to collect a debt, unpaid

municipal or district court fines and costs or final judgment of at

least Fifty Dollars ($50.00) from an individual who has filed a

state income tax return may file a claim with the Oklahoma Tax

Commission requesting that the amount owed to the qualified entity

be deducted from any state income tax refund due to that individual.

The claim shall be filed electronically in a form prescribed by the

Tax Commission and shall contain information necessary to identify

the person owing the debt, including the full name and Social

Security number of the debtor.

1. Upon receiving a claim from a qualified entity, the Tax

Commission shall deduct the claim amount, plus collection expenses

as provided in this section, from the tax refund due to the debtor

and transfer the amount to the qualified entity. Provided, the Tax

Oklahoma Statutes - Title 68. Revenue and Taxation Page 67

Commission need not report available funds of less than Fifty

Dollars ($50.00).

2. The qualified entity shall send notice to the debtor by

regular mail at the last-known address of the debtor as shown by the

records of the Tax Commission when seeking to collect a debt not

reduced to final judgment. The qualified entity shall send notice

to the judgment debtor or defendant by first-class mail at the last-

known address of the judgment debtor or defendant as shown by the

records of the Tax Commission when seeking to collect a final

judgment or unpaid court fines and costs. The Tax Commission shall

provide in an agreed electronic format to the Department of Human

Services the amount withheld by the Tax Commission, the home address

and the Social Security number of the taxpayer. The notice shall

state:

a. that a claim has been filed with the Tax Commission

for any portion of the tax refund due to the debtor or

defendant which would satisfy the debt, unpaid court

fines and costs, or final judgment in full or in part,

b. the basis for the claim,

c. that the Tax Commission has deducted an amount from

the refund and remitted it to such qualified entity,

d. that the debtor or defendant has the right to contest

the claim by sending a written request to the

qualified entity for a hearing to protest the claim,

and if the debtor or defendant fails to apply for a

hearing within sixty (60) days after the date of the

mailing of the notice, the debtor or defendant shall

be deemed to have waived his or her opportunity to

contest the claim. Provided, if the claim was filed

by the Department of Human Services, the notice shall

state that the debtor must contest the claim by

sending a written request to the Department within

thirty (30) days after the date of the mailing of the

notice, and

e. that a collection expense of five percent (5%) of the

gross proceeds owed to the qualified entity has been

charged to the debtor or defendant and withheld from

the refund.

3. If the qualified entity determines that a refund is due to

the taxpayer, the qualified entity shall reimburse the amount

claimed plus the five-percent collection expense to the taxpayer.

The qualified entity may request reimbursement of the two-percent

collection expense retained by the Tax Commission. Such request

must be made within ninety (90) days of reimbursement to the

taxpayer. If timely requested, the Tax Commission shall make such

reimbursement to the qualified entity within ninety (90) days of the

request.
d plus the five-percent collection expense to the taxpayer.

The qualified entity may request reimbursement of the two-percent

collection expense retained by the Tax Commission. Such request

must be made within ninety (90) days of reimbursement to the

taxpayer. If timely requested, the Tax Commission shall make such

reimbursement to the qualified entity within ninety (90) days of the

request.

Oklahoma Statutes - Title 68. Revenue and Taxation Page 68

4. In the case of a joint return, the notice shall state:

a. the name of any taxpayer named in the return against

whom no debt, no unpaid court fines and costs, or

final judgment is claimed,

b. the fact that a debt, unpaid court fines and costs, or

final judgment is not claimed against the taxpayer,

c. the fact that the taxpayer is entitled to receive a

refund if it is due regardless of the debt, court

fines and costs, or final judgment asserted against

the debtor or defendant,

d. that in order to obtain the refund due, the taxpayer

must apply, in writing, for a hearing with the

qualified entity named in the notice within sixty (60)

days after the date of the mailing of the notice.

Provided, if the claim was filed by the Department of

Human Services, the notice shall state that the

taxpayer must apply, in writing, for a hearing with

the Department within thirty (30) days after the date

of the mailing of the notice, and

e. if the taxpayer against whom no debt, no unpaid court

fines and costs, or final judgment is claimed fails to

apply in writing for a hearing within sixty (60) days

after the mailing of the notice, the taxpayer shall

have waived his or her right to a refund. Provided,

if the claim was filed by the Department of Human

Services, the notice shall state that if the taxpayer

fails to apply in writing for a hearing with the

Department within thirty (30) days after the date of

the mailing of the notice, the taxpayer shall have

waived his or her right to a refund.

C. If the qualified entity asserting the claim receives a

written request for a hearing from the debtor or taxpayer against

whom no debt, no court fines and costs, or final judgment is

claimed, the qualified entity shall grant a hearing according to the

provisions of the Administrative Procedures Act. It shall be

determined at the hearing whether the claimed sum is correct or

whether an adjustment to the claim shall be made. Pending final

determination at the hearing of the validity of the debt, unpaid

court fines and costs, or final judgment asserted by the qualified

entity, no action shall be taken in furtherance of the collection of

the debt, unpaid court fines and costs, or final judgment. Appeals

from actions taken at the hearing shall be in accordance with the

provisions of the Administrative Procedures Act.

D. Upon final determination at a hearing, as provided for in

subsection C of this section, of the amount of the debt, unpaid

court fines and costs, or final judgment, or upon failure of the

debtor or taxpayer against whom no debt, no unpaid court fines and

Oklahoma Statutes - Title 68. Revenue and Taxation Page 69

costs, or final judgment is claimed to request such a hearing, the

qualified entity shall apply the amount of the claim to the debt

owed. Any amounts held by the qualified entity in excess of the

final determination of the debt and collection expense shall be

refunded by the qualified entity to the taxpayer. However, if the

tax refund due is inadequate to pay the collection expense and debt,

unpaid court fines and costs, or final judgment, the balance due the

qualified entity shall be a continuing debt or final judgment until

paid in full.

E. Upon receipt of a claim as provided in subsection A of this

section, the Tax Commission shall:

1. Deduct from the refund five percent (5%) of the gross

proceeds owed to the qualified entity, and distribute it by

retaining two percent (2%) and transferring three percent (3%) to
judgment, the balance due the

qualified entity shall be a continuing debt or final judgment until

paid in full.

E. Upon receipt of a claim as provided in subsection A of this

section, the Tax Commission shall:

1. Deduct from the refund five percent (5%) of the gross

proceeds owed to the qualified entity, and distribute it by

retaining two percent (2%) and transferring three percent (3%) to

the qualified entity, as an expense of collection. The two percent

(2%) retained by the Tax Commission shall be deposited in the

Oklahoma Tax Commission Fund;

2. Transfer the amount of the claimed debt, unpaid court fines

and costs, or final judgment or so much thereof as is available to

the qualified entity;

3. Notify the debtor in writing as to how the refund was

applied; and

4. Refund to the debtor any balance remaining after deducting

the collection expense and debt, unpaid court fines and costs, or

final judgment.

F. The Tax Commission shall deduct from any state tax refund

due to a taxpayer the amount of delinquent state tax and penalty and

interest thereon, which such taxpayer owes pursuant to any state tax

law prior to payment of such refund.

G. The Tax Commission shall have first priority over all other

qualified entities when the Tax Commission is collecting a debt,

court fines and costs, or final judgment pursuant to the provisions

of this section. Subsequent to the Tax Commission priority, a claim

filed by the Department of Human Services for the collection of

child support and spousal support shall have priority over all other

claims filed pursuant to this section. Priority in multiple claims

by other qualified entities pursuant to the provisions of this

section shall be in the order in time in which the Tax Commission

receives the claim from the qualified entities required by the

provisions of subsection B of this section.

H. The Tax Commission shall prescribe or approve forms and

promulgate rules and regulations for implementing the provisions of

this section.

I. The information obtained by a qualified entity from the Tax

Commission pursuant to the provisions of this section shall be used

only to aid in collection of the debt, unpaid court fines and costs,

or final judgment owed to the qualified entity. Disclosure of the

Oklahoma Statutes - Title 68. Revenue and Taxation Page 70

information for any other purpose shall constitute a misdemeanor.

Any employee of a qualified entity or person convicted of violating

this provision shall be subject to a fine not exceeding One Thousand

Dollars ($1,000.00) or imprisonment in the county jail for a term

not exceeding one (1) year, or both fine and imprisonment and, if

still employed by the qualified entity, shall be dismissed from

employment.

J. The Tax Commission may employ the procedures provided by

this section in order to collect a debt owed to the Internal Revenue

Service if the Internal Revenue Service requires such procedure as a

condition to providing information to the Commission concerning

federal income tax.

K. The provisions of this section shall not apply to claims

filed under the provisions of Section 2906 or Section 5011 of this

title or Section 28-101 of Title 70 of the Oklahoma Statutes.