Out-of-state collections

# (A)

# (1)

As provided by Section 12-4-340, the department may contract with a collection agency, within or without this State, for the collection of delinquent taxes, including penalties and interest. Delinquent tax claims may be assigned to the collection agency, for the purpose of litigation in the agency's name and at the agency's expense, to facilitate and expedite the collection process.

# (2)

For purposes of this section, "delinquent tax claim" means a tax liability that is due and owing for a period longer than six months and for which the taxpayer has been given at least three notices requesting payment and for any subsequent tax debts issued, one notice of which includes a statement that the taxpayer's delinquency may be referred to a collection agency.

# (B)

# (1)

Fees for services, reimbursements, or other remuneration to the collection agency must be based on the amount of tax, penalty, and interest actually collected. Each contract entered into between the department and the collection agency must provide for the payment of fees for these services, reimbursements, or other remuneration not in excess of fifty percent of the total amount of delinquent taxes, penalties, and interest actually collected.

# (2)

All funds collected, less the fees for collection services as provided in the contract, must be remitted to the department within forty-five days from the date of collection from a taxpayer. The department may refund the fees for collection services to the collection agency, if all funds collected are remitted gross of fees. Forms to be used for these remittances must be prescribed by the department.

# (C)

The contract with a collection agency must provide that the collection agency acknowledges that it is receiving income from sources within this State or doing business in this State for purposes of income taxation.

# (D)

Before entering into a contract, the department shall require the collection agency to post a bond guaranteeing compliance with the terms of the contract, not in excess of one hundred thousand dollars.