Set-Off Liability (SOIL) Procedures

New Jersey Judiciary Probation Child Support Enforcement

Revised 7-2015

In this Topic

  1. A. Authority
  2. B. Overview
  3. C. Selection Criteria
  4. D. Notification of Intent
  5. E. Appeal Procedure
  6. F. PCSE Unit’s Review of the Appeal
  7. G. Receipt and Distribution of Funds

A. Authority

Code of Federal Regulations:

45 C.F.R. § 301.12

New Jersey Statutes Annotated:

N.J.S.A. 2A: 17-56.16
N.J.S.A. 54A: 9-8.1

Other Authorities:

Cooperative Agreement 1992 Tax Offset Handbook (DFD)

B. Overview

The collection of New Jersey State Income Tax Refunds, Homestead Rebates and Saver Rebates from NCPNon-custodial parents to satisfy outstanding arrears is a secondary enforcement tool.  Because it is an automated process, minimal effort and monitoring is needed provided the case meets certain eligibility requirements; is properly coded on NJKiDS and the NCP is given due process of law – notification of intent and an opportunity for contesting (appealing) the intended action.

The review and resolution of an Administrative Appeal is a manual process that may require the exchange of documents, such as correspondence, orders or audits between the OCSSOffice of Child Support Services Tax Offset Unit, local PCSEProbation Child Support Enforcement Units and the NCP.

C. Selection Criteria

For a case to be selected the following conditions must be met:

  1. there must be an open IV-D case (alimony only cases are not selected because they are Non IV-D),
  2. a valid Social Security Number must exist,
  3. the Tax Exempt code field is blank,
  4. a valid Interstate code must exist,
  5. the NCP must owe a minimum equivalent to one month of accrued support charges on a case with a current obligation (Age of child[ren] is not relevant),
  6. On arrears only cases, the NCP must owe at least $25.00.

D. Notification of Intent

  1. At the beginning of every December (the master file) and again in April, NJKiDS certifies eligible cases statewide for SOIL.
  2. The SOIL Pre-Offset Notice (Notice) is a letter of intent.   It informs the NCP that the Division of Revenue has been notified to withhold his or her refund/rebate.
  3. The Notice also advises the NCP to begin gathering appropriate documents that will be needed in the event he or she wants to file an appeal.
  4. The subsequent Notice of Intended Set-Off informs the NCP and non-obligated spouse/joint-taxpayer that their (Joint) State Income Tax Refund and/or Homestead Rebate and/or SAVER Rebate is being held.   At the end of 45 days the refund will be disbursed to pay down the child support or child/spousal support debt unless an appeal is filed with the New Jersey DFDDivision of Family Development).

Note: The Division of Revenue issues the Notice of Intended Set-Off. Also, separate notices for State Income Tax Offset, Homestead, and Saver Rebates may be issued.

E. Appeal Procedure

  1. Effective the date of the Notice, the person identified as the NCP has 35 days to submit an appeal in writing to the OCSS.
  2. Phone calls and impromptu visits to the PSCE Unit should not be accepted in lieu of the written appeal sent directly to the OCSS.
  3. The NCP must state the reasons and include evidence supporting the claim.
  4. Appeals must be based on a mistake of fact in order to be considered as valid. For example:
    1. The person identified in the Notice is not the NCP.
    2. The account does not have qualifying arrears because of a new court order reducing support retroactively or a court order vacating support and/or arrears.
    3. The person identified in the Notice of Intended Set-Off is a non-obligated spouse who filed a joint state income tax return, and/or Homestead/Saver Rebate Return and does not want their portion of the offset to be applied toward the child support/spousal and child support debt.
    4. The account does not have qualifying arrears (NCP made direct payments in which the CP acknowledges).
  5. OCSS is responsible for prescreening all SOIL appeals to determine the validity of the appeal. Valid appeals concerning a mistake of fact, documented arrears disputes and court orders will be referred to the PCSE Unit for an Administrative Review.
  6. In the event that the OCSS rejects the NCP’s appeal, the Department of Revenue will be notified after the 35-day period to release the refund to NJKiDS to be processed into the NCP’s child support account.
  7. When the OCSS accepts an appeal filed by the joint taxpayer (parties have filed a joint tax return filing) it will set the proration indicator such that only 50% of the tax monies are released by SOIL. These monies are automatically distributed upon receipt.
  8. If it is determined that the injured party is entitled to the full refund, the NCP can be deleted from SOIL and the money refunded to the injured party.

F. PCSE Unit’s Review of the Appeal

  1. Upon receipt of the appeal from the OCSS, PCSE staff will begin investigating the NCP’s claim that his or her account does not qualify for SOIL.

  2. If the claim is valid, PCSE staff within 3 business days must notify the OCSS to delete the case from the OCSE file by submitting a completed Administrative Hearing/Resolution Form (Attachment 1610A). Otherwise, PCSE staff within 30 business days must conduct an Administrative Review.  The PCSE Unit has 10 days to notify the NCP, CP, and their attorneys (if represented by one) of the time, date, and place of the Administrative Review.  PCSE staff will open the Administrative Review chain.

    1. Note: Only when a court order recommends the case be exempted from reporting should PCSE staff update the TAXI screen utilizing the exempt code.  PCSE staff must review the order to determine whether the exemption is intended for future offsets.  If no time frame is provided in the order, staff should enter an end date 90 days from the court order date.  In this way, the case can be selected for future tax offsets should the arrears qualify.

  3. For appeals that have issues too complex to resolve through an Administrative Review, PCSE staff should schedule the matter before a CSHOChild Support Hearing Officer.

Note: If a NCP is not satisfied with the results of the Administrative Review, he or she has the option of filing a motion to stop SOIL.

G. Receipt and Distribution of Funds

  1. Upon conclusion of the Administrative Review or hearing, PCSE staff must notify the OCSS by submitting a completed Administrative Hearing/Resolution Form and by completing the Administrative Review chain.
  2. For cases that do not qualify for SOIL, the OCSS will delete the case from its file and a detailed explanation is entered on TAXI Notes.
  3. For cases that are coded L-Setoff Request on the TAXI screen, which certifies they are eligible for SOIL offset, NJKiDS will disburse an amount up to the arrears and the remainder will go on Futures hold.   For charging cases, it will appear under the SNFX hold code and for non-charging cases the SNAX hold code. The money will release automatically once additional arrears accumulate.
  4. When a case is not coded for Tax Offset and tax money is received it will appear under the SNSN hold code for 90 days.  Should arrears accrue staff can manually release the hold. If it is a charging case the excess will go on futures hold. If it is a non charging case the money will be auto refunded to the NCP after 14 days of the held date.  Alternatively, the system will release the money once a setoff request is received and TAXI is updated.  
  5. SOIL offsets received but not yet posted and offsets that have been posted can be viewed on the ELOG and RHIS screens.  

 

Institute for Families, School of Social Work  Rutgers, the State University of New Jersey Judiciary Probation Child Support Enforcement

New Jersey Judiciary Probation Child Support Enforcement, revised 7-2015