KRS 131.570 — Debtor to be notified that refund is subject to setoff -- Hearing -- Transfer of refund -- Payment of excess to taxpayer

(1) Upon determining that a pending individual income tax refund is subject to setoff as
authorized under this section, the deb tor shall be notified in writing by the
department of the claim made against such refund by the named claimant agency,
and of the department's intention to set off the refund against the debt to the
claimant agency. The notice shall provide that the debtor , within thirty (30) days
from the date of the notice, may request a hearing before the claimant agency as
provided by statute or local ordinance. No issues at such hearing may be considered
that have been litigated previously, and the debtor, after being given due notice of
rights of appeal, must exercise such rights in a timely manner. The decision of the
claimant agency shall be subject to appeal as all other decisions rendered by the
claimant agency. No funds shall be transferred to a claimant agency un til the
debtor's appeal rights have been exhausted.
(2) Any excess of the pending refund amount over the total claim filed against such
refund shall be promptly issued to the taxpayer by the department.
(3) In the event funds transmitted to a claimant agen cy are subsequently determined by
the claimant agency to be in excess of the liquidated debt, such claimant agency
shall promptly refund the excess to the taxpayer.
(4) In the event the department erroneously transfers funds to a claimant agency, the
claimant agency shall immediately upon notification thereof reimburse the
department for the amount erroneously transmitted to such agency. The department
shall promptly refund to the taxpayer the appropriate amount of such returned funds
with interest as provided in KRS 131.183(2).