Section 1003.22 - Administrative Bank Attachment for Accounts of Obligors to the Commonwealth(a) Provided that an obligor has not entered into and is in compliance with a deferred payment plan with the department, the department may order the attachment and seizure of funds in an obligor's account that the department reasonably believes to hold property subject to a lien recorded in favor of the Commonwealth for tax, interest additions or penalties due to the Commonwealth. Upon receiving seized funds, the department shall apply the amount seized to the obligor's lien obligation.(b)(1) If the department has a reasonable belief that an obligor's account holds property subject to a lien in favor of the Commonwealth, the department may order the attachment of funds in the obligor's account by sending a notice to the financial institution.(2) The notice given to a financial institution attaching an account of the obligor shall be sent by an electronic format or any other reasonable manner as agreed to by the department and the financial institution.(3) The notice shall include all of the following: (i) The name of the obligor.(ii) The amount of the Commonwealth's lien, including interest and penalty accrued up to forty-five days after the date of notice.(iii) The current or last known address of the obligor.(iv) The Social Security number, Federal employer identification number or other taxpayer identification number of the obligor.(v) An order to immediately attach one or more accounts held by the financial institution in the name of the obligor for an aggregate amount equal to the lesser of the amounts in all accounts or the Commonwealth's lien.(c)(1) Upon receipt of the notice described in subsection (b), the financial institution shall, by the end of the fifth business day following the date of the notice, attach one or more of the accounts of the obligor held by the financial institution for an aggregate amount equal to the lesser of: (i) the total of the amounts in all the accounts of the obligor held by the financial institution as of the date of attachment; or(ii) the amount stated in the notice. Upon the attachment and until the financial institution receives further notice from the department or on order of a court, as provided in this section, the financial institution may not allow any activity to reduce the amounts in any of the accounts below the amount of the attachment.
(2) Within five days after date of notice to the financial institution described in subsection (b), the financial institution shall inform the department that the financial institution has complied with the attachment order and shall specify the aggregate amount attached pursuant to the order.(3)(i) The financial institution may assess a reasonable administrative fee against the accounts or the obligor in addition to the amount attached. An administrative fee may include a fee permitted to be assessed under an agreement between the obligor and the financial institution in connection with the early withdrawal of a certificate of deposit attached under this section.(ii) In the case of insufficient funds to cover both the fee authorized by subparagraph (i) and the amount identified in the notice under subsection (b), the financial institution may first deduct the fee from the amount attached and retain it from the amount seized and forwarded to the department as provided in this section.(d)(1) Except as otherwise provided in paragraph (3), no later than five business days after the date of the notice in subsection (b)(2), the department shall send a notice to the obligor by first class mail to the obligor's current or last known address and may attempt to deliver personal notice to the obligor.(2) The notice shall contain the following information: (i) The address of the department.(ii) The telephone number, address and name of a contact person at the department.(iii) The name and Social Security number, Federal employer identification number or other taxpayer identification number of the obligor.(iv) The current or last known address of the obligor.(v) The total amount of the Commonwealth's lien owed by the obligor, including interest and penalty accrued up to forty-five days after the date of notice.(vi) The date the notice is being sent.(vii) A statement informing the obligor that the department has ordered the financial institution to attach the amount of the Commonwealth's lien owed by the obligor from one or more of the accounts of the obligor.(viii) For each account of the obligor, the name of the financial institution that has been given notice to attach amounts as required by this section.(ix) A statement that the order may be challenged or relief from the order requested in accordance with subsection (e).(x) A statement informing the obligor that unless a timely challenge is made by the obligor, the financial institution or an account holder of interest under subsection (e), the department shall notify the financial institution to seize the amount attached by the financial institution and forward it to the department.(3) The department shall not be required to send the notice described under this subsection if, prior to the time that the notice must be sent, the department and the obligor agree to an arrangement under which the obligor will pay amounts owed under the Commonwealth's lien.(e)(1) An obligor, the financial institution or an account holder of interest may challenge the actions of the department under this section by filing a motion with the court of common pleas within ten days of the date of the notice sent under subsection (d).(2) An obligor, the financial institution or an account holder of interest may challenge or seek relief from the actions of the department based on: (i) a mistake as to any of the following:(A) The identity of the obligor.(B) The ownership of the account.(C) The contents of the account.(D) The amount of the lien obligation due.(ii) the exclusion of the account from attachment under this section;(iii) the failure of the department to properly record the lien upon which the attachment is based;(iv) the failure of the department to send notice to the obligor of the assessment or determination of the tax, interest, penalties or addition to tax upon which the attachment is based;(v) severe economic hardship;(vi) a request for spousal relief from joint liability; or(vii) any other good cause.(3) Except as provided in paragraph (2)(iv), an obligor, the financial institution or an account holder of interest may not challenge the actions of the department based on a mistake or error in the original assessment underlying a lien against the obligor.(f)(1) If a timely challenge or request from relief is not made by the obligor, the financial institution or an account holder of interest under subsection (e), the department shall direct the financial institution to: (i) seize the amount attached by the financial institution and forward it to the department;(ii) reduce the amount attached by the financial institution to a revised amount as stated by the department, seize the revised amount and forward it to the department and release the balance of the account; or(iii) release the amount attached by the financial institution.(2) The department may direct a financial institution to seize and forward attached funds before the time for filing a timely challenge under subsection (e) upon agreement among the department, the obligor and, in cases where the department is aware of an account holder of interest, the account holder of interest.(g)(1) If a determination is made by the court, pursuant to a challenge or request for relief under subsection (e), that the account of the obligor should not have been attached, the department shall notify the financial institution, in the manner specified in subsection (b)(2), to release the amount attached by the financial institution.(2) If a determination is made by the court, pursuant to a challenge or request for relief under subsection (e), to reduce the amount attached by the financial institution, the department shall notify the financial institution, in the manner specified in subsection (b)(2), to revise the amount as stated by the department, to seize and forward the revised amount to the department and to release the balance of the account attached by the financial institution.(3) If a determination is made by the court, pursuant to a challenge or request for relief made under subsection (e), that the attachment by the financial institution was proper, the department shall notify the financial institution, in the manner specified in subsection (b)(2), to seize the amount attached by the financial institution and forward it to the department.(h) A financial institution that complies with an order and notice from the department under this section shall not be criminally or civilly liable to any person, including the department, the obligor or any account holder of interest, for any of the following:(1) disclosing information to the department under this section;(2) attaching an account as directed by the department;(3) sending any amount seized to the department;(4) wrongful dishonor or any other claim relating to the attachment and seizure of any account as ordered by the department; or(5) any other action taken in good faith to comply with the requirements of this section.(i) A financial institution shall not be required to reimburse fees assessed against an account or an obligor as a result of the department instituting an action under this section or as otherwise permitted by law or authorized by contract even if there is a successful challenge or relief is granted under subsection (e).(j)(1) If, under the provisions of this section, a financial institution fails to attach accounts as required in a timely manner or fails to forward the proper amount of funds attached to the department at the time and in the manner required by this section, the financial institution may be subject to a penalty of five per cent of the amount of funds which should have been attached or forwarded for each month or fraction thereof from the date the funds should have been attached or forwarded to the date the funds are attached or forwarded. The total amount of the penalty shall not exceed fifty per cent of the proper amount of funds which should have been attached or forwarded.(2) The penalty imposed by this section shall be assessed, enforced, administered or collected under the provisions of Article II.(k) This section shall not be construed to prohibit the department or any other Commonwealth agency from collecting obligations due from an obligor in any other manner authorized by law.(l) No financial institution may be required to notify an obligor or an account holder of interest of a request for information under this section by the department or a court.(m) Prior to attaching an account under this section, the department shall develop guidelines:(1) describing its tax collection procedures;(2) describing the rights and remedies available to taxpayers;(3) disclosing the circumstances in which the department may attach an account under this section;(4) describing the policies regarding spousal relief and severe economic hardship relief;(5) advising financial institutions of the requirements of this section; and(6) describing the department's policies and procedures used to attach and seize accounts under this section.(n) As used in this section, the following words and phrases shall have the meanings given to them in this subsection: "Account."
(1) Any of the following:(i) Funds from a demand deposit account, checking account, negotiable order of withdrawal account, savings account, time deposit account, money market mutual fund account or certificate of deposit account.(ii) Funds paid toward the purchase of shares or other interest in an entity as described in paragraphs (1) and (2) of the definition of "financial institution."(iii) Funds or property held by a depository institution as described in paragraph (3) of the definition of "financial institution."(2) The term shall not include any of the following: (i) An account subject to a security interest, control agreement or pledged security for a loan or other obligation.(ii) Funds or property deposited to an account after the time that a financial institution initially attaches the account.(iii) An account that a financial institution has a present right to exercise a right of setoff either under an agreement between the financial institution and the obligor or otherwise under applicable law.(iv) An account that has an account holder of interest named as an owner on the account.(v) An account that an obligor does not have an unconditional right of access.(vi) An account that can not be attached under Federal law. "Account holder of interest." A person, other than an obligor of an account, who asserts an interest in an account based upon ownership, possession of a security interest, lien or judgment.
"Department." The Department of Revenue of the Commonwealth.
"Financial institution." Any of the following:
(1) A depository institution, as defined in section 3(c) of the Federal Deposit Insurance Act (64 Stat. 873, 12 U.S.C. § 1813(c)).(2) A Federal credit union or State credit union, as defined in section 1752(1) of the Federal Credit Union Act (48 Stat.1216, 12 U.S.C. § 1752(1)).(3) A benefit association, safe deposit company, money market mutual fund or similar entity doing business in this Commonwealth that holds property or maintains accounts reflecting property belonging to others. "Obligor." Any of the following:
(1) An entity engaged in a business whose property is subject to a Commonwealth tax lien or liens totaling at least one thousand dollars ($1,000).(2) An individual operating as a sole proprietor whose property is subject to a Commonwealth tax lien or liens totaling at least one thousand dollars ($1,000).(3) A shareholder, member or partner of a pass-through entity whose property is subject to a Commonwealth tax lien or liens totaling at least one thousand dollars ($1,000).(4) A corporate officer or other responsible individual who has been assessed pursuant to the provisions of section 225 or 320 and whose property is subject to a Commonwealth tax lien or liens totaling at least one thousand dollars ($1,000). "Pass-through entity." A partnership as defined in section 301(n.0) or a Pennsylvania S corporation as defined in section 301(n.1).
Added by P.L. 751 2012 No. 85, § 26.1, eff. 1/1/2013.