§ 3208. Administrative garnishment

(a) Notwithstanding other statutes that provide for levy or execution, trustee process, or attachment, the Commissioner may garnish a taxpayer's earnings pursuant to this section to satisfy amounts collectible by the Commissioner under this title, subject to the exemptions provided in 12 V.S.A. § 3170(a) and (b)(1).

(b) The Commissioner may contact an employer to obtain verification of a delinquent taxpayer's employment, earnings, deductions, and payment frequency as necessary to determine disposable earnings. The employer shall be immune from any liability for release of this information to the Commissioner.

(c) At least 30 days prior to initiating wage garnishment, the Commissioner shall demand payment from the taxpayer and notify the taxpayer that he or she is subject to garnishment under this section. This notice shall be sent by first class mail to the taxpayer's last known address. The mailing of notice shall be presumptive evidence of receipt.

(d) After 30 days, a notice of garnishment shall be sent by certified mail to the taxpayer, and 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 garnishment and the taxpayer may appeal in the manner provided in subsection 5885(b) of this title. This shall be the taxpayer's exclusive remedy with respect to a garnishment under this section.

(e) If, after 15 days, the taxpayer has not petitioned for a hearing, a notice of garnishment shall direct an employer to transmit a specified portion of the taxpayer's disposable earnings to the Commissioner from each periodic payment that is due to the taxpayer until the taxpayer's obligation is paid in full. The notice shall identify the taxpayer by Social Security number. An employer is immune from any liability due to compliance with the Commissioner's notice of garnishment.

(f) If a hearing is requested in a timely manner under this section, the garnishment which is the subject of the requested hearing shall be suspended for the period during which such appeal is pending. Fifteen days after an appeal is resolved, the notice of garnishment shall direct an employer to transmit a specified portion of the taxpayer's disposable earnings to the Commissioner from each periodic payment that is due to the taxpayer until the taxpayer's obligation is paid in full. The notice shall identify the taxpayer by Social Security number.

(g) At a hearing under this section, the taxpayer may raise any relevant issue relating to the unpaid tax or the proposed attachment:

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

(2) whether the garnishment exceeds the exemption amount, which shall be 80 percent of the debtor's weekly disposable earnings, or 40 times the federal minimum hourly wage, whichever is greater;

(3) whether the garnishment exceeds the amount permissible under 12 V.S.A. § 3170(a); or

(4) the statute of limitations to collect the liability expired before the notice of attachment was sent.

(h) 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.

(i) An employer's obligation to transmit garnished wages to the Commissioner shall begin with the first periodic payment of earnings following receipt of the notice of garnishment unless the notice is withdrawn by the Commissioner. An employer who fails to withhold and transmit the garnished earnings to the Commissioner shall be liable for such amounts and may be assessed in the same manner as withholding taxes are assessed under chapter 151 of this title. As soon as reasonably practicable, the employer shall notify the Commissioner of the termination of the taxpayer's employment. No taxpayer may be discharged from employment on account of garnishment under this section against the taxpayer's wages.

(j) The Commissioner forthwith shall notify the employer in writing and the employer shall cease withholding from the earnings of the taxpayer:

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

(2) when the garnishment exceeds the amount permissible under 12 V.S.A. § 3170(a) and (b)(1).

(k) Wage garnishment under this section and other collection measures provided by law are cumulative.

(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) "Disposable earnings" means that part of the earnings of any individual remaining after the deduction from those earnings of any amounts required by law to be withheld and the amount of any wage garnishment payable to the Office of Child Support.

(2) "Earnings" means compensation paid or payable for personal services, whether denominated as wages, salary, commission, bonus, or otherwise, and includes periodic payments pursuant to a pension or retirement program and proceeds from the sale of milk with respect to an individual engaged in the occupation of farming, but does not include payments from sources which by law are exempt from attachment.

(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, § 43; amended 2015, No. 134 (Adj. Sess.), § 2, eff. May 25, 2016.)