§ 3207. Administrative attachment

(a) Notwithstanding other statutes that provide for levy of execution, trustee process, and attachment, the Commissioner, pursuant to this section, may attach tangible and intangible property of a taxpayer to satisfy amounts collectible by the Commissioner under this title by transmitting a notice of attachment to a financial institution or person holding property belonging to or owed to a taxpayer.

(b) The Commissioner may contact a financial institution to obtain verification of the account number, the names, and Social Security numbers listed for an account, and account balances of accounts held by a delinquent taxpayer. A financial institution is immune from any liability for release of this information to the Commissioner.

(c) At least 30 days prior to attaching a taxpayer's property, the Commissioner shall demand payment from the taxpayer together with notice that the taxpayer is subject to attachment of property under this section. This notice shall be sent by first class mail to the taxpayer's last known address. The mailing of the notice shall be presumptive evidence of its receipt.

(d) A notice of attachment shall direct the financial institution or person to transmit all or a portion of the property in the taxpayer's accounts or owed to the taxpayer to the Commissioner up to the amount owed to the Commissioner. The notice shall identify the taxpayer by Social Security number or federal employer identification number. Upon receipt of the notice, the financial institution or person forthwith shall remit the amount stated in the notice or the amount held or owned by such financial institution or person, whichever is less, to the Commissioner. Notwithstanding the foregoing, any financial institution shall surrender any deposits in such bank only after 21 days after transmittal of the notice of attachment. During the 21-day hold period, the financial institution shall not release the attached funds to the taxpayer unless the Commissioner releases the attachment. A financial institution is immune from any liability due to compliance with the Commissioner's notice of attachment.

(e) A copy of the notice of attachment transmitted to the financial institution or person holding property due to the taxpayer shall be sent by certified mail to the taxpayer at the time it is transmitted to the financial institution or person. The taxpayer may, within 15 days of mailing, petition the Commissioner in writing for a hearing under this section. The Commissioner shall grant a hearing on the matter as provided in subsection 5885(a) of this title at which the taxpayer bears the burden of proof. The Commissioner shall notify the taxpayer in writing of his or her decision concerning the attachment and the taxpayer may appeal in the manner provided in subsection 5885(b) of this title, which shall be the taxpayer's exclusive remedy with respect to an attachment under this section.

(f) At a hearing under this section, the taxpayer may raise the following claims relating to the proposed attachment;

(1) whether the notice of attachment has identified the wrong taxpayer;

(2) whether the proposed attachment includes property that would be exempt from attachment and levy under 12 V.S.A. § 2740 in a judicial attachment;

(3) the statute of limitations to collect the liability expired before the notice of attachment was sent; and

(4) the taxpayer may propose a collection alternative, including a payment plan or offer in compromise, but only if there has been a change in the taxpayer's Vermont tax liability based on a change in his or her federal tax liability since the Vermont liability was assessed.

(g) The hearing under this section shall be conducted by an officer or employee who is not an employee of the Compliance Division of the Department of Taxes.

(h) If a hearing is requested in a timely manner under this section, the attachment shall be suspended and the financial institution shall not release the attached funds for the period during which the appeal is pending.

(i) After a hearing, the taxpayer may propose a collection alternative, including a payment plan or offer in compromise, but only if there has been a change in the taxpayer's federal tax liability or on a change in the amount that is subject to attachment as a result of the hearing.

(j) Attachment under this section and other collection measures provided by law are cumulative.

(k) The Commissioner forthwith shall notify the financial institution in writing and the financial institution shall cease attachment:

(1) upon full payment of the amounts collectible by the Commissioner; or

(2) when the attachment exceeds the amount permissible under 12 V.S.A. § 2740.

(l) A determination under subdivision 5888(1) of this title will be reflected in the amounts collectible by the Commissioner.

(m) As used in this section:

(1) "Financial institution" includes financial institutions as defined in 8 V.S.A. § 11101(32) and credit unions as defined in 8 V.S.A. § 30101(5).

(2) "Intangible property" means property that has no intrinsic value, but is merely the representative of value such as cash, accounts, rents, stocks, bonds, promissory notes, or other instruments that create a payment obligation.

(3) "Person" has the same meaning as in section 3001 of this title.

(n) The Commissioner shall contract with an outside independent organization or enter into a memorandum of understanding with a different State agency to provide advocate services to taxpayers subject to the provisions of this section. The organization or agency providing the services shall be independent of the Department of Taxes. The advocate services provided under this subsection shall include technical assistance and representation in the administrative processes and hearings under this section. (Added 2015, No. 57, § 42.)