State Debt Collection Initiative
2009 Wisconsin Act 28 authorizes the State Debt Collection (SDC) program allowing state agencies to partner with the Department of Revenue (DOR) in collection of debt to enhance current collections operations. DOR has worked very hard to improve efficiencies through both expanded legislative authority and new technology, we will share these efficiencies with other state agencies, the legislature, courts authorities, and local governments.
The reference for the State Debt Collection program is located within sec. 71.93, Wis. Stats., which defines refund setoffs for other state agencies. Expansion of this section allows state agencies, the legislature, courts authorities, and local governments to utilize collection tools beyond refund offsets. Included among DOR collection tools are the ability to enter into electronic repayment agreements, attach a debtor's wages or levy a debtor's bank account to secure repayment.
The statute requires all state agencies enter into an agreement with DOR no later than June 30, 2010. The courts, the legislature, certain authorities, and local units of government may enter into agreements.
A debt means any amount owed to a government agency where the debt has been reduced to a judgment or the debtor has been notified and has been given an opportunity to be heard with regard to the amount owed. The debt must be more than 90 days past due and must not be subject to an open legal action or administrative proceeding.
Debts will not be submitted to DOR for collection if the debtor enters into a repayment agreement with the agency or is in negotiations to resolve the debt.
At least 30 days prior to referral, the debtor must be notified in writing that the debt will be referred to DOR for collection. A warning letter with language of DOR possible collection actions is a powerful tool to encourage debtors to pay prior to referral to DOR.
DOR Collection Authorities
The DOR may use the same collection authorities to collect state debt as used to collect delinquent taxes.
DOR and Agency Interaction
Through file transfers, DOR and agencies will communicate details about the referred debts. The process of referring a debt involves establishing a debtor match, setting a debt up in our collection system, allowing for adjustments, recalls, and returns, and communicating collection results. The DOR uses a combination of social security number or federal employer identification number and name as the match keys. The file contains elements of information to both set up a record and assist the collection agents answering basic debt questions. File transfers will include:
- New debt/Debt Update file – Debtor and debt details needed to establish a collection case and adjust debt balances.
- Response file – Answer to the new debt file to communicate accepted debts and rejected debts.
- Return file – Allows DOR to return a debt to the agency if determined to be uncollectible.
- DOR transaction file – Detail file reporting collections for the agency from the 1st to the End of Month for the previous month. This file should reconcile to the monthly payment remitted to the agency.
FOR MORE INFORMATION PLEASE CONTACT:
WISCONSIN DEPARTMENT OF REVENUE
Mail Stop 4-206
PO Box 8901
Madison, WI 53708-8901
Phone: (608) 264-0344
Fax: (608) 261-6226
Email additional questions to SDC@revenue.wi.gov
December 9, 2015
Updates were made to the code or formatting on this page as of January 14, 2016. This date does not reflect the effective date or any other date relating to the content of this page.