Delinquent Child Support

Family Code Division 17, Chapter 2, Article 1.5 deals with delinquent child support obligations and financial institution data match.

Section 17450 defines the terms “child support delinquency” and “earnings.” The department may return or allow a local child support agency to retain a child support delinquency for a specified purpose for collection where the department determines that the return or retention of the delinquency for the purpose so specified will enhance the collectibility of the delinquency.

The department is required to establish a process whereby a local child support agency may request and shall be allowed to withdraw, rescind, or otherwise recall the submittal of an account that has been submitted. Consistent with the development and implementation of the California Child Support Enforcement System, the Franchise Tax Board and the department entered into a letter of agreement and an interagency agreement whereby the department shall assume responsibility for collection of child support delinquencies and the Financial Institution Data Match System as set forth in this article. The letter of agreement and interagency agreement must set forth at least three specified items.

Section 17452 requires the Franchise Tax Board to make tax return information available to the department, upon request, for the purpose of collecting child support delinquencies referred to the department. However, the Franchise Tax Board does not incur any obligation or liability to any person arising from any of the three specified actions.

Section 17453 requires the department, in coordination with financial institutions doing business in this state, to operate a Financial Institution Data Match System utilizing automated data exchanges to the maximum extent feasible. The Financial Institution Data Match System was implemented and is maintained pursuant to guidelines prescribed by the department. These guidelines include a structure by which financial institutions, or their designated data-processing agents, receive from the department the file or files of past-due support obligors compiled so that the institution matches with its own list of accountholders to identify past-due support obligor accountholders at the institution.

To effectuate the Financial Institution Data Match System, financial institutions subject to this section are required to do specified tasks. A financial institution does not incur any obligation or liability to any person arising from any of four specified actions. The department forwards to the counties, in accordance with guidelines prescribed by the department, information obtained from the financial institutions pursuant to this section. The terms “account” and “financial information” are defined.

Section 17454 requires the department to request that a depository institution provide the department with a designated address for receiving notices to withhold. Once the depository institution has specified a designated address, the department must send all notices to that address unless the depository institution provides notification of another address. The department is required to send all notices to withhold to a new designated address 30 days after notification.

Section 17456 provides that any person required to withhold and transmit any amount pursuant to this article to comply with the requirement without resort to any legal or equitable action in a court of law or equity. Any person paying to the department any amount required by it to be withheld is not liable therefore to the person from whom withheld unless the amount withheld is refunded to the withholding agent.

However, if a depository institution withholds and pays to the department pursuant to this article any moneys held in a deposit account in which the delinquent obligor and another person or persons have an interest, or in an account held in the name of a third party or parties in which the delinquent obligor is ultimately determined to have no interest, the depository institution paying those moneys to the department is not liable therefore to any of the persons who have an interest in the account, unless the amount withheld is refunded to the withholding agent.

Section 17460 requires the department to seek reciprocal agreements with other states to improve its ability to collect child support payments from out-of-state obligated parents on behalf of custodial parents residing in California. The department may pursue agreements with the Internal Revenue Service, as permitted by federal law, to improve collections of child support delinquencies from out-of-state obligated parents through cooperative agreements with the service.

The California Child Support Enforcement System is required to include the capacity to interface and exchange information, if feasible, with the Internal Revenue Service, to enable the immediate reporting and tracking of obligated parent information. The department has to enter into any interagency agreements that are necessary for the implementation of this article.