Workforce Services, Unemployment Insurance

Section R994-305-1201

Offer in Compromise

Notice of Proposed Rule

(Amendment)

DAR File No.: 37023
Filed: 11/01/2012 04:48:08 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of this amendment is to establish rules for an offer in compromise.

Summary of the rule or change:

S.B. 129 in the 2012 General Session directed the Department to establish rules that would allow employers and claimants to compromise debts owed to the Department for past due contributions, interest, penalties, and costs and fault and nonfault benefit overpayments. This proposed amendment establishes a procedure and eligibility standards for applying for and allowing a compromise.

State statutory or constitutional authorization for this rule:

• Subsection 35A-4-502(1)(b)
• Subsection 35A-1-104(4)
• Section 35A-1-104
• Subsection 35A-4-305(12)

Anticipated cost or savings to:

the state budget:

This is a federally-funded program so there are no costs or savings to the state budget. Any costs associated with the changes would be as a result of the statutory change and not this rule.

local governments:

This is a federally-funded program so there are no costs or savings to any local government budget. Any costs associated with the changes would be as a result of the statutory change and not this rule.

small businesses:

This is a federally-funded program so there are no costs or savings to small businesses. Any costs associated with the changes would be as a result of the statutory change and not this rule. A small business with no ability to pay past due contributions may qualify for a compromise.

persons other than small businesses, businesses, or local governmental entities:

There will be no costs or savings to persons other than small businesses, businesses, or local government as there are no fees associated with this change.

Compliance costs for affected persons:

There are no costs or savings to any affected persons as there are no fees associated with this program and it is federally funded. It is not anticipated that a sufficient number of employers or claimants will be eligible for a compromise so it is not likely there will be any impact on rates.

Comments by the department head on the fiscal impact the rule may have on businesses:

There are no compliance costs associated with this change. There are no fees associated with this change. There will be no cost to anyone to comply with these changes. There will be no fiscal impact on any business. These changes will have no impact on any employers contribution tax rate.

Jon Pierpont, Acting Executive Director

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Workforce Services
Unemployment Insurance
140 E 300 S
SALT LAKE CITY, UT 84111-2333

Direct questions regarding this rule to:

• Suzan Pixton at the above address, by phone at 801-526-9645, by FAX at 801-526-9211, or by Internet E-mail at spixton@utah.gov

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

12/17/2012

This rule may become effective on:

12/24/2012

Authorized by:

Jon Pierpont, Acting Executive Director

R994. Workforce Services, Unemployment Insurance.

R994-305. Collection of Contributions.

R994-305-1201. Offer in Compromise.

(1) If an employer or claimant is unable to pay the total amount owing of past due contributions, interest, penalties, costs or fault or nonfault benefit overpayments, the employer or claimant may request an application for offer in compromise, pursuant to Section 35A-4-305(12). In order for an offer in compromise to be considered the employer or claimant must:

(a) complete an application and provide verification of total income, expenses, assets, and liabilities;

(b) show there is no expectation that financial resources will significantly improve within three years of the date of the application. Being currently unemployed or underemployed alone is insufficient to meet the requirements of this provision;

(c) not have a current rejected offer in compromise issued by the Utah State Tax Commission within twelve months of the date of application with the Department; and

(d) have not been granted an offer in compromise by the Department in the ten years prior to applying for an offer in compromise.

(2)(a) The Department may compromise a portion of any past due liability for contributions, interest, penalties or costs to an employer if the employer can show it has an inability to pay the full amount owing within three years of the date of application or payment would result in the insolvency of the employing unit.

(b) The Department may compromise a portion of any fault or nonfault overpayment owed by a claimant if the claimant can show he or she does not have the ability to pay the full amount owing within three years of the date of application.

(3) If the Department accepts an offer in compromise, the acceptance will be rescinded and the compromised liability will be reestablished if it is subsequently determined that:

(a) any employer, claimant, or person acting on behalf of any employer or claimant, provided false information or concealed information that lead to the granting of such compromise;

(b) the employer or claimant fails to timely pay the total amount agreed upon;

(c) the employer or claimant is not current with all obligations under the Employment Security Act for at least three years from the date of the application; or

(d) an offer in compromise is rejected by the Utah State Tax Commission within twelve months following the date the application with the Department was approved.

(4) The determination of the Department is final and not appealable. However, the Department may consider an amended offer in compromise application that is substantially different from the rejected application.

 

KEY: unemployment compensation, overpayments

Date of Enactment or Last Substantive Amendment: [July 1, 2007]2012

Notice of Continuation: December 3, 2009

Authorizing, and Implemented or Interpreted Law: 35A-4-305(1)