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RULE §3.16Delinquent Taxpayer Financial Records; Information Exchange

(a) Definitions. The following words and terms, when used in this subsection, shall have the following meanings, unless the context clearly indicates otherwise.

  (1) Account--A demand deposit account, checking or negotiable order of withdrawal account, savings account, time deposit account, or money market mutual fund account.

  (2) Account owner record--A record a financial institution uses to report account owner information, including:

    (A) an account holder's name, social security number, or federal employer identification number; and

    (B) the account balance and account type.

  (3) Comptroller's agent--A third-party vendor with whom the comptroller contracts to facilitate the exchange of information with a financial institution.

  (4) Data match--The process by which the comptroller uses account holder information provided by a financial institution to secure payment of a delinquent taxpayer's tax debt. A data match begins when a delinquent taxpayer's case is created by the Enforcement Division, includes the levy of funds from a delinquent taxpayer's account, and ends 30 days after the delinquent taxpayer's case is closed by the Enforcement Division.

  (5) Delinquent taxpayer--A person who at the time of a data match request under subsection (b) of this section is delinquent in a tax or fee administered by the comptroller.

  (6) Financial institution--

    (A) A depository institution, as defined by Federal Deposit Insurance Act (12 U.SC. §1813(c)), Section 3(c);

    (B) a federal credit union or state credit union, as those terms are defined by Federal Credit Union Act (12 U.S.C. §1752), Section 101; or

    (C) the agent of an entity described by subparagraph (A) or (B) of this paragraph.

  (7) Inquiry file--An electronic file sent by the comptroller or the comptroller's agent to a financial institution that contains a record of delinquent taxpayers.

(b) Exchange of information. Each calendar quarter, a financial institution doing business in this state shall exchange information with the comptroller or the comptroller's agent as provided in this subsection. The comptroller and the comptroller's agent may not ask a financial institution to exchange information more than once each calendar quarter.

  (1) Matched accounts method. No later than 45 days after the date the comptroller or the comptroller's agent provides the inquiry file to a financial institution, the financial institution must submit to the comptroller or the comptroller's agent an electronic file listing all of the account owner records of the accounts owned at the financial institution by each delinquent taxpayer identified in the inquiry file.

  (2) Optional method of reporting: all accounts method. In lieu of exchanging information using the matched accounts method, a financial institution may submit to the comptroller or the comptroller's agent an electronic file listing all of the financial institution's account owner records for all open accounts. The comptroller or the comptroller's agent will create an electronic file listing all account owner records for the accounts owned at the financial institution by delinquent taxpayers.

  (3) Compatibility. The exchange of information shall be performed in a manner that is compatible with the data processing system of the financial institution.

(c) Notification of account holders. A financial institution may not notify an account holder that the financial institution has exchanged account holder information with the comptroller or the comptroller's agent as provided in subsection (b) of this section.

(d) Confidentiality. Information provided by or to a financial institution, the comptroller, or the comptroller's agent for the purpose of performing a data match is confidential and may not be used for any purpose or disclosed to any person except as necessary to perform a data match. The financial institution, the comptroller, and the comptroller's agent shall return, destroy, or erase any information obtained after completion of the data match. Information collected from a financial institution pursuant to this section is available for the collection of delinquent taxes only and is not available for other debt collection activities undertaken by the state.

(e) Liability of financial institutions for disclosure of information. A financial institution is not liable to any person for disclosing information to the comptroller under this section or for any other action that the financial institution takes in good faith to comply with this section.

(f) Due process. A statutory levy executed during a data match is subject to the statutory procedures and due process protections of Tax Code, §111.021 (Notice to Holders of and Levy Upon Assets Belonging to Delinquent).

(g) Suit to enforce exchange of information. A suit to enforce this section must be brought by the attorney general in the name of the state. Venue for the suit is in Travis County.

Source Note: The provisions of this §3.16 adopted to be effective Setember 7, 2022, 47 TexReg 5339

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