What does SC Revenue Ruling 15-13 say about South Carolina's Debt Setoff and GEAR collection programs?

Plain-English summary

South Carolina Revenue Ruling 15-13 explains that the Department of Revenue assists governmental entities and claimant agencies in collecting liabilities through two programs:

• Debt Setoff under the Setoff Debt Collection Act; and
• the Governmental Enterprise Accounts Receivable Collections Program, known as GEAR.

The ruling does not reproduce the detailed procedures. Instead, it withdraws Revenue Procedural Bulletin 02-2 and directs governmental entities, debtors, and other affected parties to the Department's Governmental Entity Collection Programs Guide for current requirements.

Collection actions identified

The ruling says the Department may use program tools to:

• garnish South Carolina income tax refunds or wages;
• file tax liens;
• levy bank accounts; or
• revoke a debtor's business license.

It expressly states that due-process requirements exist.

What the guide covers

The Department's guide was described as covering program conditions and administration, including:

• governmental-entity registration;
• notice requirements;
• hearing requirements; and
• sample notices to debtors.

Because the ruling itself says the online guide provides the most up-to-date information, current users should consult the Department's present materials rather than rely on the 2015 website path, telephone number, or email address printed in the ruling.

Common questions

Q: Does the ruling authorize collection without notice or a hearing?

A: No. It specifically says due-process requirements exist and points to the program guide for notice and hearing procedures.

Q: Is Revenue Procedural Bulletin 02-2 still the operative procedure?

A: No. RR 15-13 withdrew it.

Q: Does RR 15-13 contain all eligibility and procedural rules?

A: No. It directs agencies, debtors, and affected parties to the Department's collection-program guide.

Citations and references

• S.C. Code Ann. § 12-4-580 (GEAR)
• S.C. Code Ann. Chapter 56 of Title 12 (Setoff Debt Collection Act)
• SC Revenue Procedural Bulletin #02-2 (withdrawn by this ruling)

Subject

Debt Setoff and GEAR Procedures

Source

• Landing page: https://dor.sc.gov/advisory-opinion-search
• Original PDF: https://dor.sc.gov/sites/dor/files/policies/RR15-13.pdf

Original ruling text

STATE OF SOUTH CAROLINA

DEPARTMENT OF REVENUE
300A Outlet Pointe Blvd., Columbia, South Carolina 29210
P.O. Box 12265, Columbia, South Carolina 29211

SC REVENUE RULING 15-13

SUBJECT:

Debt Setoff and GEAR Procedures
(Administrative)

EFFECTIVE DATE: December 1, 2015
SUPERSEDES:

Revenue Procedural Bulletin # 02-2 and all previous documents and any
oral directives in conflict herewith.

REFERENCE:

S.C. Code Ann. Section 12-4-580 (2014)
S.C. Code Ann. Section 12-56-10, et seq. (2014)

AUTHORITY:

S.C. Code Ann. Section 12-4-320 (2014)
SC Revenue Procedure #09-3

SCOPE:

The purpose of a Revenue Ruling is to provide guidance to the public. It is
an advisory opinion issued to apply principles of tax law to a set of facts or
general category of taxpayers. It is the Department’s position until
superseded or modified by a change in statute, regulation, court decision,
or another Departmental advisory opinion.

Under the Setoff Debt Collection Act of Chapter 56 of Title 12 (“Debt Setoff”) and the
Governmental Enterprise Accounts Receivable Collections Program in Code Section 12-4-580
(“GEAR”), the Department is authorized to assist in the collection of liabilities due other
governmental entities or claimant agencies. Through these collection tools, the Department may
garnish South Carolina income tax refunds or wages, file tax liens, levy on bank accounts or
revoke a debtor’s business license. Due process requirements exist.
The Department has developed a “Governmental Entity Collection Programs Guide” to provide
governmental entities, debtors, and other parties who may be affected by the collection program
information and conditions about the administration of the program, including program
registration, notice and hearing requirements and sample notices to debtors. This information is
available on the Department’s website at www.dor.sc.gov under the “Local Government” menu.
This updated information on the Department’s website provides the most up-to-date information
concerning these programs. Accordingly, SC Revenue Procedural Bulletin #02-2 is no longer
needed and is withdrawn.

Questions concerning the program should be directed to the Department at 803-898-5755 or to
[email protected].
SOUTH CARLINA DEPARTMENT OF REVENUE

s/Rick Reames III
Rick Reames III, Director
December 2
, 2015
Columbia, South Carolina

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