How will the expense reimbursements
be paid to the financial institutions?
What method will be used
to make these payments?
What information will be
supplied with the levy payment?
If a financial institution has any overdraft
charges or for example, a car loan outstanding with the tax debtor whose account
is matched and the levy is served on their account, can the bank offset the loan
or overdraft charges that are owed to the bank before sending the levied funds to
MN Revenue?
Related to the previous question, what if a
tax debtor has a CD that has funds held as collateral for a loan through the financial
institution is the CD subject to levy also?
What if a bank has a perfected security interest
on a CD, is that exempt from a levy?
What types of accounts are subject to the data
match program?
What financial institutions must participate in the data
match program?
What is the methodology of performing the data match?
How does Method One, the All Account Method, work?
How does Method Two, the Matched Accounts Method, work?
How
often must the data match be conducted?
What data is returned to MN DOR’s Collection Division for use in
collecting delinquent tax debts?
Can a financial institution be held liable for the
release of account information relating to the Minnesota Financial
Institution Data Match program and the
levies that may result?
Will the Minnesota financial institutions receive a fee
for conducting the data match?
Are IRA accounts
eligible for levy under the financial institution data match program?
As a follow up to that,
who is responsible for the tax liabilities?
Should safe deposit box
account information be included in the data match file?
How will the expense reimbursements
be paid to the financial institutions?
The Minnesota Department of Revenue, Collection Division
will pay the financial institutions up to $150 per calendar quarter to defray costs
borne by Financial Institutions in their efforts to participate in the program.
Unlike the program administered by the Minnesota Department of Human Services,
there is no payments or reimbursement to Financial Institutions for levies issued
by Revenue that result from account matches obtained by DOR through this program.
What method will be
used to make these payments?
The State will issue one payment per quarter. Whether the
payment is made in the form of a paper check or is conveyed via EFT will depend on
how the Financial Institution is registered as a vendor with the Minnesota Department
of Finance.
What information
will be supplied with the levy payment?
Payments made via paper check will have a memo on the stub
"FIDM REIMBURSEMNT QUARTER YEAR" Further itemization is not possible
because of privacy restrictions.
If a financial institution has any
overdraft charges or for example, a car loan outstanding with the tax debtor whose
account is matched and the levy is served on their account, can the bank offset the
loan or overdraft charges that are owed to the bank before sending the levied funds
to MN Revenue?
A financial institution can offset the loan or overdraft
charges, if the account is security for such charges. For example, if an individual
has a savings account that is security for a loan, only the funds in excess of that
security should be seized.
However, if an individual has two accounts, one being a
checking account that has an overdrawn charge and one being a savings account,
the financial institution cannot use funds from one account to pay the other
account unless that other account has previously been identified as security
for the overdrawn account.
And if an individual has a loan which is delinquent AND
another account, such as a savings account, the financial institution cannot
hold back funds to pay the loan unless the account was previously identified
as security for that account or the financial institution has already taken
the appropriate action to satisfy the delinquent loan with those funds.
Related to the previous question,
what if a tax debtor has a CD that has funds held as collateral for a loan through
the financial institution is the CD subject to levy also?
The amounts in excess of the security are subject to the levy.
What if a bank has
a perfected security interest on a CD, is that exempt from a levy?
The same exemptions that apply to other
levy actions also apply to these levy actions.
What
types of accounts are subject to the data match program?
- Demand deposit accounts
- Checking accounts or negotiable withdrawal order accounts
- Savings accounts
- Time deposit accounts
- Money-market mutual fund accounts
What
financial institutions must participate in the data match program?
- Bank and savings and loans
- Federal and State credit unions
- Money market mutual funds
What
is the methodology of performing the data match?
There are
two reporting methods for financial institutions: Method One (the all
accounts method) and Method Two (the matched accounts method)
How
does Method One, the All Account Method, work?
- Financial institutions submit a file identifying all open accounts to DOR via its vendor, PSI.
- The MN DOR’s Collection Division conducts an internal match against tax debtors.
- The collection division may issue levies to attach and seize the asset(s) of the tax debtor.
How
does Method Two, the Matched Accounts Method, work?
- MN DOR’s Collection Division submits an inquiry file, containing tax debtors,
to the financial institution.
- The financial institution conducts an internal match against its
open accounts.
- The financial institution sends a file to the MN DOR Collection Division that
reports information on all accounts maintained by individuals on the inquiry file.
- The match report must be returned to the State within 30-45 days
of receipt of the inquiry file.
- MN DOR’s Collection division may issue levies to attach and seize the asset(s)
of the matched tax debtors
How
often must the data match be conducted?
It must
be performed quarterly.
What data is returned to MN DOR’s
Collection Division for use in collecting delinquent tax debts?
Financial institutions are required to provide the name,
record address, Social Security number or other taxpayer identification number,
and other identifying information for each match. Account balances are not
required. The inclusion of this information will, however, significantly reduce
the likelihood of the Collection Division issuing levies against accounts with
small balances. Recall, from above that DOR does not reimburse or make payments
to Financial Intuitions on a per levy issued basis.
Can
a financial institution be held liable for the release of account
information relating to the Minnesota Financial Institution Data Match program and
the levies that may result?
No, Minnesota State Statute 13B.07 Subdivisions 9 and 10
established that a financial institution shall not be liable under state law to
any person for any disclosure of information to the Commissioner of Revenue.
Moreover, Financial Institutions are prohibited from disclosing to a tax debtor
that his/her name has been received from or furnished to DOR.
Financial institutions will not be held liable for any other
action taken in good faith to comply with the requirements of FIDM.
Will
the Minnesota financial institutions receive a fee for conducting the
data match?
In accordance with Minnesota Statute 13B.07, subdivision 7,
a financial institution may charge and collect a fee from DOR for providing account
information. The DOR may pay a financial institution up to $150.00 each quarter
if the Department and the financial institution have entered into a signed agreement
that complies with provisions of the program.
Payment of the fee is limited by the amount of the
appropriation for this purpose. If the appropriation is insufficient, or if fund
availability in the fourth quarter would allow payments for actual costs in excess
of $150.00 per quarter, the Department will prorate the available funds among
the financial institutions that have submitted a claim for the fee.
Are IRA accounts
eligible for levy under the financial institution data match program?
Yes, All 401K, 403B, KEOGH, IRA's etc.
are eligible for levy as long as the person/employee (privately, publicly or self-employed)
is the one who controls the account, i.e. can decide to take money out of the
account.
As a follow up to
that, who is responsible for the tax liabilities?
The account holder is responsible for
all tax liabilities resulting from the early withdrawal of funds due to a financial institution
data match levy.
Should safe deposit
box account information be included in the data match file?
No, this information should not be
included. The contents of safe deposit boxes are not subject to levy.