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1 July 19
Debt Collection Act
Welcome the Debt Collection Act Training. This course contains multiple lessons for referring agencies
The course contains the following lessons:
• Resources
• Disclosure
• Referring Debts
• Payments and Balances
• Program participation
Resources
This lesson will tell you what resources are available to you and how to access them.
When it comes to referring debts, you have a couple of resources. Our website contains up-to-date
information for debt referral and provides instructions on how to complete a number of tasks. Access
our website at www.revenue.state.mn.us.
To bookmark the Referring Agency page do the following:
Step 1: Open a web browser.
Step 2: Type “Minnesota Department of Revenue” in the search field and press the Enter key.
Step 3: Select the Minnesota Department of Revenue link.
Step 4: Select the Other Agency Debt link in the For Local Governments column.
Step 5: Select the Referring Agencies link.
Step 6: Bookmark this page to add to your Favorites.
Sections organize the Referring Agencies page.
•
The Referral Process section provides information on debt types to refer and contact information.
•
The Resources section has links to resources and common issues.
•
The e-Services Information section provides links to log into e-Services, instructions, and help
topics.
Another resource is our staff. The Client Relations Program is specific to the Collection Division.
Revenue Collection Officers staff the program to help you with your questions.
The entire team is committed to collecting other agency debts and the department’s collection costs at
the lowest cost to the state.
The specialized training the program members receive allows them to ensure the accuracy of referred
debts. They do this by reviewing accounts, making adjustments when needed, and communicating with
referring agency staff members to answer questions and to resolve potential issues.
The best way to contact us is by e-Services Web messages or email us at mdor.client@state.mn.us.
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Disclosure
This lesson will discuss security and define private information.
Emails and working online help us communicate faster and more efficiently.
Along with those conveniences, we must increase security to prevent identity theft. Businesses spend
thousands of dollars each year to ensure their customer’s information is safe.
For government agencies, statute or the Rules of Public Access to Records of the Judicial Branch
identifies who can have access to what information. Minnesota law defines public, non-public, and
private information. These laws apply to the Debt Collection Act.
When granted access to e-Services, you must access it under your own username and password. If you
share your information, you are taking full responsibility for any information accessed and any changes
under your ID.
The content within the Referring Agencies system is private and confidential.
Agencies are responsible for providing data privacy and anti-browsing training to employees who refer
debt or who manage referred debts.
In general, private or non-public information can only be shared between the debtor and the agency.
Statute sixteen D point zero six allows the Minnesota Department of Revenue and agencies to transfer
private information in order to collect debts.
The statute also allows passing information to the Taxpayer Rights Advocate and the Attorney General.
Private information includes Social Security numbers, names, and addresses. For court users, consider
the debtor’s Social Security number as non-public.
You could face civil or criminal penalties for disclosing information for purposes outside of
administering the referral of debts. This includes fines or possible jail time.
Employees with access to this information may not share it, regardless of their employment status. If
you or another employee terminate your employment, you are still required, by law, not to share the
information with anyone.
To ensure you are following disclosure and data privacy laws, use these general guidelines.
• Do not tell or show people information they are not entitled to know.
• Lock up private information when you are away from your desk.
• Do not research or obtain information on or for yourself, family, friends, or acquaintances.
After training notify us when an employee is no longer with your agency. If an employee leaves your
agency and still has access to e-Services, then they have access to all of the private debtor information.
This poses potential risks for both of our agencies and the debtors.
To secure access to e-Services set up private usernames and passwords by contacting the Client
Relations Program.
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Each user must have and maintain their own username. Keep passwords secret and secure. Change the
password if another person knows it.
Secure access to e-Services by locking your computer when you are not at your desk, or log out of e-
Services when not actively working. Review only information you have a business-need to know.
Contact your supervisor, legal division, or disclosure officer on how to proceed if there is a violation or
suspected violation.
Referring Debts
This lesson will discuss the process of referring debts including when to send your notification letter,
what to include in the letter, and what debts are eligible.
When your agency is ready to refer debts to the department, make sure there are no surprises for the
debtor.
You must confirm, or authenticate, the debtor’s identity through written, telephone, or face-to-face
contact with the debtor before notifying them of your intention to refer the debt to the Department of
Revenue for collections. Once you authenticate the debtor, the notification needs to be timely and
contain the right information.
You must send notification by U.S. mail or personal delivery to the debtor’s last known address at least
twenty days before referring your debt.
Minnesota Statute 16D.07 outlines what information must be included in your notice. The Demand for
Payment letter we send to debtors after you refer debts to us contains similar language.
A helpful way to remember what is required is to use the acronym D I C E or dice.
D is for debt details. This includes the reason for the debt. You can include multiple debts on the same
letter, as long as you provide the reason for each debt. Include any information that will help the
debtor understand. At a minimum, you must include why they owe the debt, whom they owe it to, and
the amount of the debt.
I is for interest. If your debt is interest bearing, it will continue to accrue interest.
C is for collection costs. You must include that collection costs up to twenty five percent will be
assessed and that the debtor has a right to ask for cancellation of those collection costs.
E is for enforced collection action. The Minnesota Department of Revenue can take enforced collection
action according to Minnesota Statute 16D.08, including, filing liens against property and issuing levies
against wages or bank accounts.
We can offset eligible Minnesota and Wisconsin state tax refunds, Minnesota and federal tax
payments, and lottery winnings.
4
We can subpoena financial, personal, or business records, revoke or deny renewal or transfer of
business and professional licenses. We can access non-public government data, obtain legal
judgements, report them to a credit bureau, and refer their debt to a private collection agency.
There is a sample notification on our website. Contact the Client Relations Program if you would like us
to review your letter to ensure it meets the minimum requirements.
If your current letters do not meet the notification requirements, we will return the debt. To resubmit
the debt, you must send proper notification to the debtor. We will verify that you sent the proper
notification.
When you are ready to refer a debt, confirm that it is eligible. Eligible debts are at least twenty-five
dollars at the time of the referral. If a debt falls below twenty-five dollars, we will close and return it
unless it is on an active payment agreement or wage levy.
Do not refer debts that are under appeal, in a dispute, or if a debtor is negotiating payment or in legal
or pre-legal status. You cannot refer debts that have an expired statute of limitations or will expire in
the next one hundred eighty days. If you refer debts that are ineligible, we will return the debts
informing you why they are ineligible.
After you confirm your debt is eligible, make sure to cancel any Revenue Recapture claims specific to
the debt. You must stop sending demands for payment or trying to collect the debt. Keep any
documents related to the debt until you recall or we return the debt. An example of a document would
be to keep your notice to the debtor. Use a unique agency debtor and debt identification number.
These numbers may not include Social Security numbers, federal employee identification numbers, or
Minnesota IDs.
When referring and keeping debts up to date, there are two options, e-Services or electronic file
exchange. Agencies with a high volume of debts use Virtual Room for electronic file exchange.
If you are a new referring agency or need a new debt type added, you must complete the Debt Referral
Questionnaire.
The questionnaire ensures we have the correct information on your agency, the debt type, if the debt
bears interest, pay off order, how to submit payments to you and how you will refer debts.
When referring debts with interest, you choose how our system will calculate the interest. You tell us
how frequently the debt accrues interest and whether the interest rate is fixed or variable. If you apply
interest and the rate changes annually, you will need to complete a new Debt Questionnaire. If your
interest updates more frequently please contact the Client Relations Program.
Our system tracks interest daily, however it only updates the account balance every thirty days or
when something happens such as a payment posts or a Revenue Collection Officer does a manual
update.
5
Payments and Balances
This lesson explains payment application, interest-bearing debts, debt balances, disputes, and recalling
a debt.
An agency referred a two thousand dollar interest bearing debt to the Minnesota Department of
Revenue. The debt enters the system and the department assesses collection costs. We hold the debt
in our system for five days and it continues to accrue interest. After five days, our system sends a bill
and the debtor has thirty days to pay in full without additional interest added to the payoff.
If a bill is sent on the first day of the month, the debtor has thirty days to pay the debt in full without
additional interest added. If they pay the amount on the letter, by the due date, we consider it paid in
full and return the debt with a zero balance.
The debt questionnaire provides you with choices on how to apply payments. One choice is to have
payments apply to penalty first, then interest, principal, and finally fees or other costs. You could
choose to have payments apply to principal first, then penalty, interest, and finally to fees or other
costs. If neither applies to you, you can provide us with an explanation and your statutory
requirements on the Debt Referral Questionnaire.
If a customer negotiates a payment agreement with us for two hundred fifty dollars a month and you
select to pay penalty first, payments apply to penalty first, they then apply to interest and then
principal, with a portion of the payment applying to collection costs.
When we receive payments without a voucher for a referred other agency debt, it applies to either the
period with the earliest referral date or the bill item with the earliest origination date.
If the agency referred two debts on different days, one on June thirtieth and one on October fifteenth
for the same year. If we receive a payment without a voucher, it will apply to the June 30 date first.
Likewise, if the agency referred two debts together, on the same day, for the same debtor, and we
receive payment without a voucher it would apply to the debt with the oldest origination date.
When refunds apply, they have a specified order as well. They apply first to tax debt, then child
support, then restitution, then to medical claims including hospital and ambulance debts, and finally
other debts.
You should not accept direct agency payments. If a debtor contacts your agency to make a payment
after their debt was referred to the department, have them contact us. By doing so you reduce
potential balance inconsistencies and other issues with their debt.
By accepting a direct agency payment, it posts in your system. When you report the payment to us, we
cannot guarantee it will post proportionately to the payment application you selected when referring a
debt.
If
you do receive a direct agency payment from a debtor on a referred debt, report the payment
through your agency’s electronic reporting method. If your agency only uses the Statewide Integrated
Financial Tools (SWIFT) accounting system, send the payment directly to us.
If the effective date was incorrect on a direct agency payment, we cannot change it. You need to
submit the correction.
Once you refer a debt, you may not add to it. If you did not include the whole balance when you
referred the debt, you may refer the additional balance as a new debt or recall the debt and resubmit
it. You must send new notification to the debtor. You are not required to refer the additional amount
and may manage it yourself.
Part of managing debt referrals is ensuring we have an up-to-date balance to prevent overpayments.
The reports provided in e-Services help you manage your debts and reconcile your balance with ours.
If you notice any discrepancies let us know right away. Use the report date and Letter ID you are
referencing; this will help us locate the report.
Update balances within five business days when you become aware of a change. Use your agency’s
electronic reporting method.
If there is a credit on current or previously referred debts, contact us before you issue any refunds.
We will determine the amount of the refund, who to send it to, and who will issue it.
It is your responsibility to notify us when a debt is resolved. If you do not and we continue to collect
on your behalf, you will be responsible to pay our collection costs.
Frank calls us because he received a Demand for Payment for a court fine. He insists he paid the debt.
This is an example of a dispute. When a debtor contacts us disputing a debt, we will determine what
they are disputing. If it is a collection action or our claim for offset, we will handle their dispute. If it is
the origination date or the debt itself, we will refer them to you.
When you receive a valid dispute for a debt referred to us, you must let us know and either recall the
debt or contact us to request time to make a determination. Recall the debt if the dispute will last
longer than sixty days.
Once you make a determination you must let us know the outcome of the dispute within five business
days and report any changes through your reporting method.
6
7
When you recall a debt for any reason, you need to notify us. Recall a debt when the debt was referred
in error, an active dispute will extend beyond sixty days, the debtor is in bankruptcy, or a
determination is made that the debtor is not liable.
In general, you cannot re-refer a debt after recalling it. Exceptions to this include when a dispute is
resolved, the debtor is out of bankruptcy and the debt is still valid, or the debtor failed to comply with
court ordered community service.
Program Participation
This lesson will discuss the service level agreement, suspending system access, audits, and annual
training.
The Debt Collection Act Service Level Agreement outlines participation and use of the program. An
agency administrator signs the agreement. It includes statutory authorization, both the statute number
sixteen D. All members who manage referred debts are expected to understand its contents.
It also includes definitions of words used throughout the agreement, duties of both the referring
agency and the department and data practice responsibilities.
Legal requirements including the length of the agreement and what would result in a suspension from
accessing the system.
Suspending an agency’s system access is a serious action, and one we do not take lightly. Our ultimate
goal is to uphold the statute and to protect debtor’s rights.
A suspension may occur when an agency violate any part of the Service Level Agreement, does not
have staff members attend the Minnesota Department of Revenue’s annual required training, or does
not cooperate with our audit process.
We will notify and explain any violations and provide an opportunity for you to understand the
violation, implement a fix, and appeal by contested claim hearing.
A reinstatement occurs after ninety days if the agency provides documentation on what steps they
took to fix and prevent the violation.
The Referring Agency Debt Collection program is successful for agencies and the department. By
regularly reviewing practices, we strive to hold the program to the highest standard in accordance with
the law. We will continue with our audit process ensuring we maintain these high standards.
Audits of the program allow us to address issues of non-compliance, safeguard debtor information, and
reduce the amount of work for both agencies and us.
Audits of the program ensure everyone follows the Service Level Agreement and laws that apply and
that our information is up-to-date. It also reduces work for us and the agencies by ensuring balances
are correct, which means less overpayments and refunds.
8
Knowledge Check
1. If someone logs into e-Services under your username and password, you are responsible for the
information they access.
2. What are ways to confirm or authenticate a debtor’s identity?
3. If your notification to the debtor does not contain all of the information in Minnesota Statute
16D.07 we will return the debt.
4. A debtor contacts you to make a payment for a referred debt. Should you accept the payment?
5. Martin is disputing a debt your agency referred to the Minnesota Department of Revenue. It will
take your agency 90 days to make a determination. What do you need to do?
You have completed the Debt Collection Act training to receive credit please select the Submit button.
Correct answers for the Knowledge Check.
1. If someone logs into e-Services under your username and password, you are responsible for the
information they access.
The correct answer True, never share your username or password as you are responsible for any
information accessed under your access.
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2.
What are ways to confirm or authenticate a debtor’s identity?
The correct answer is d). There are several ways to authenticate the debtor.
3.
If your notification to the debtor does not contain all of the information in Minnesota Statute
16D.07 we will return the debt.
The correct answer is true. Your notification to the debtor must contain the correct information.
Remember the acronym DICE.
4.
A debtor contacts you to make a payment for a referred debt. Should you accept the payment?
The correct answer is No. You should not accept payments on referred debts.
5. Martin is disputing a debt your agency referred to the Minnesota Department of Revenue. It will
take your agency 90 days to make a determination. What do you need to do?
The correct answer is b); you must notify us and recall the debt.
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