103 KAR 1:150. Electronic data match and levy procedures.

 

      RELATES

TO: KRS 131.670, 131.672, 131.674, 131.676, 205.772, 205.774

      STATUTORY

AUTHORITY: KRS 131.672(7)

      NECESSITY,

FUNCTION, AND CONFORMITY: KRS 131.672(7) requires the Department of Revenue to

promulgate an administrative regulation to establish the procedures to be

followed by the Department of Revenue and Kentucky financial institutions in

implementing and operating a data match and levy system to assist the

Department of Revenue in collecting delinquent taxes and debts owed to the

Commonwealth. This administrative regulation establishes the electronic data

match and levy procedures.

 

      Section

1. Definitions. (1) "Debt" is defined by KRS 131.670(1).

      (2)

"Debtor" is defined by KRS 131.670(2).

      (3)

"Delinquent taxpayer" is defined by KRS 131.670(4).

      (4)

"Department" is defined by KRS 131.670(3).

      (5)

"Financial Institution" is defined by KRS 131.670(5).

      (6)

"Levy" is defined in KRS 131.500(10).

 

      Section

2. Electronic Data Match and Levy Program Implementation. The

department shall have access to identifying information for a delinquent

taxpayer or debtor who the department has identified to a financial institution

through a data match for the purpose of levying the

account of the delinquent taxpayer or debtor to pay the delinquent tax or debt.

 

      Section

3. Electronic Data Match Reporting. (1) A financial institution shall:

      (a)

Select a preferred matching method in the Data Matching Memorandum of Agreement;

      (b)

Exchange information with the department by way of an automated data exchange system. If the financial institution demonstrates

to the department that it does not have the necessary computer capabilities to

exchange information by way of an automated data exchange system, the

department may issue a waiver to allow the financial institution to exchange information

by paper;

      (c)

Submit information to the department on a quarterly basis in the format

prescribed by the Financial Data Match Specifications Handbook, using either

the all accounts method or matched accounts method.

      1.

If a financial institution agrees to provide the information according to the

all accounts method, the financial institution shall:

      a.

Submit to the department, or the department’s authorized agent, within fifteen

(15) days after requested by the department, data files of open accounts for

the data match; and

      b.

Report the name, record address, Social Security number, Federal Employer

Identification number, and account status on any account maintained by the financial

institution;

      2.

If a financial institution agrees to provide the information according to the

matched accounts method, the financial institution shall, within fifteen (15)

days after submission to the financial institution by the department of an inquiry,

file:

      a.

Match the inquiry file of delinquent taxpayers and debtors identified and

provided by the department, or by the department’s authorized agent, against

open accounts maintained by the financial institution; and

      b.

Submit a report of matched accounts to the department or its authorized agent

containing the name, record address, Social Security number, Federal Employer

Identification number, and account status on any account maintained by the financial

institution;

      (d)

Maintain a security process to assure that information received from the department

or its authorized agent concerning a delinquent taxpayer or debtor shall:

      1.

Be maintained and safeguarded as confidential; and

      2.

Not be copied or given to any other entity without the written permission of

the department, or the delinquent taxpayer or debtor; and

      (e)

Incur no liability for providing a file to the department in accordance with an

approved format as described by the Financial Data Match

Specifications Handbook.

 

      Section

4. Levy. (1) If a financial data match occurs, a financial

institution shall:

      (a) Hold, encumber or surrender an account to the

department upon receipt of a Notice of Levy, Revenue Form 12B020, which is

incorporated by reference in 103 KAR 3:010, Section 2(1)(rr);

      (b)

Address and send to the department notices, paperwork, tapes or other electronic

communication resulting from a financial institution data match

program; and

      (c)

Submit the date files required by Section 3 of this administrative regulation

to the department.

      (2)

The match of an

account holder to a delinquent taxpayer or debtor record provided by the department

shall not constitute a levy. An account shall not be held, encumbered, or surrendered

to the department without a financial institution having received a notice of levy

from the department.

 

      Section

5. Incorporation by Reference. (1) The following material is incorporated by

reference:

      (a)

"Data Matching Memorandum of Agreement", July 2008; and

      (b)

"Financial Data Match Specifications Handbook", edition 11/07.

      (2)

This material may be inspected, copied, or obtained, subject to applicable

copyright law, at the Department of Revenue, Division of Collections, 501 High

Street, 8th Floor, Frankfort, Kentucky 40620, Monday through Friday, 8 a.m. to 5

p.m. (35 Ky.R. 675; Am. 1435; eff. 1-5-2009.)