Written by Lorraine De Lois.
Pursuant to General Statute 105A, the Setoff Debt Collection Act (SODCA) program allows state and local agencies to file claims with the Department of Revenue for taxpayers’ individual income tax refunds. A debt owed to the university has no statute of limitations.
What does this mean for former students?
Although the Cashier’s Office “writes off” uncollectible student accounts each year, this only means that the university no longer shows the balances as outstanding receivables. The student account continues to keep the balance on account. These balances are sent weekly to the NC Department of Revenue. Each time one of these accounts gets a tax return or wins the lottery, the university is sent funds to offset the debt.
How the Process Works
The NC Department of Revenue notifies the person with a past due account that the university has a claim against their income tax refund or state lottery winnings. The amount owed to the university (or a portion thereof) plus a SODCA collection fee is deducted from the individual’s state tax refund or lottery winnings and forwarded to the university. The collection fee is retained by the NC Department of Revenue. The university will apply the funds received as a payment against the outstanding account balance. The university will send a letter to the last known address of the individual informing them that they have thirty (30) days to contest the debt owed.