Chapter DWD 113

Register June 2007 No. 618

Chapter DWD 113

SETTLEMENT OF DISPUTES AND COMPROMISE OF LIABILITIES

DWD 113.001   Definitions.

DWD 113.01   Purposes.

DWD 113.02   Settlement.

DWD 113.025   Waiver of interest.

DWD 113.03   Compromise of employer liability.

DWD 113.04   Compromise of personal liability.

DWD 113.05   General procedural provisions.

DWD 113.06   Disposition of warrants.

DWD 113.07   Reopening compromised liability.

Ch. DWD 113 Note Note: Chapter ILHR 113 was effective on March 1, 1994, except that ss. ILHR 113.03 and 113.04 are also applicable to installment payment agreements entered on or after January 7, 1990. Chapter ILHR 113 was renumbered Chapter DWD 113 under s. 13.93 (2m) (b) 1., Stats. and corrections made under s. 13.93 (2m) (b) 6. and 7. Stats., Register, June, 1997, No. 498.

DWD 113.001 DWD 113.001 Definitions.

DWD 113.001(1) (1) Except as provided in sub. (2), unless the context clearly indicates a different meaning, the definitions in ch. DWD 100 apply to this chapter.

DWD 113.001(2) (2) In this chapter:

DWD 113.001(2)(a) (a) “Action” means a circuit court proceeding for judicial review of a commission decision or an appeal to either the court of appeals or the supreme court.

DWD 113.001(2)(ar) (ar) “Bureau of legal affairs” means legal counsel in the unemployment insurance division within the department.

DWD 113.001(2)(bm) (bm) “Compromise” means department agreement to accept payment of less than the full amount of contributions, payments in lieu of contributions, interest, penalties and costs, as applicable, owed by an employer, former employer, or a person liable for an employing unit’s liabilities, in complete fulfillment of the outstanding liability.

DWD 113.001(2)(c) (c) “Determination” means an initial determination issued under s. 108.10 (1), Stats.

DWD 113.001(2)(d) (d) “Employer”, in addition to the meaning specified in s. 108.02 (13), Stats., includes an employing unit which was formerly an employer under s. 108.02 (13), Stats.

DWD 113.001(2)(e) (e) “Same business or operation” means operation under the same unemployment insurance employer account, including any account transferred under s. 108.16 (8), Stats., with no intervening final determination of account termination under s. 108.02 (13) (i), Stats., provided that “same business or operation” shall not be deemed to extend beyond the date the account would have been terminated under s. 108.02 (13) (i), Stats., and s. DWD 110.09 but for an unpaid liability, unless the account was reopened under s. DWD 110.10.

DWD 113.001(2)(f) (f) “Settle” means to resolve a pending determination, decision or action by agreement.

DWD 113.001 History History: Cr. Register, February, 1994, No. 458, eff. 3-1-94, r. (intro.), (5), renum. (1), (4), (6) and (7) to be (2) (a), (b), (c) and (d), renum. (2), (3), (8), (9) and (10) to be 110.02 (9), (10), (44), (51) and (52), cr. (1), (2), Register, September, 1995, No. 477, eff. 10-1-95; CR 18-033: am. (1), (2) (intro.), renum. (2) (b) to DWD 100.02 (15m) and am., cr. (2) (ar), (2) (bm) renum. from DWD 100.02 (10) and am., am. (2) (d), (2) (e) renum. from DWD 100.02 (51) and am., (2) (f) renum. from DWD 100.02 (52) Register May 2019 No. 761, eff. 6-1-19; correction in (2) (bm) made under s. 35.17, Stats., Register May 2019 No. 761.

DWD 113.01 DWD 113.01 Purposes.

DWD 113.01(1) (1) This chapter establishes standards for the following circumstances:

DWD 113.01(1)(a) (a) The settlement of disputes between the department and parties to determinations, decisions or actions.

DWD 113.01(1)(b) (b) The compromise of liabilities for contributions, reimbursements in lieu of contributions, interest, penalties and costs assessed under ch. 108, Stats.

DWD 113.01(1)(c) (c) In limited circumstances, waiving or decreasing the interest charged under s. 108.22 (1) (a) or 108.17 (2c) (c), Stats.

DWD 113.01(2) (2) This chapter does not affect the application of s. 108.10 (1) and (6), Stats.

DWD 113.01 History History: Cr. Register, February, 1994, No. 458, eff. 3-1-94; CR 13-106: am. (1) (intro.), cr. (1) (c) Register July 2014 No. 703, eff. 8-1-14.

DWD 113.02 DWD 113.02 Settlement.

DWD 113.02(1) (1) Under s. 108.10 (8), Stats., the department may settle in whole or in part:

DWD 113.02(1)(a) (a) Any determination that has been appealed, has not become final and has been referred from the bureau of tax and accounting to the bureau of legal affairs.

DWD 113.02(1)(b) (b) Any decision or action that has not become final.

DWD 113.02(2) (2) Settlement shall be based upon advice of the bureau of legal affairs, who shall certify that, after having fully investigated the matter, it is the opinion of the bureau of legal affairs that one or more of the following conditions exists:

DWD 113.02(2)(a) (a) The department has made an error of law or fact which, if corrected, would negate or change the determination issued in the case.

DWD 113.02(2)(b) (b) Given the available evidence, there is significant doubt that the department will prevail in the dispute on specific issues and there is little or no likelihood of producing sufficient additional evidence in favor of the department regarding the issues before or at a hearing under s. 108.10 (2), Stats.

DWD 113.02(2)(c) (c) Before a hearing under s. 108.10 (2), Stats., the department has discovered additional relevant and material evidence that would negate or change the determination in the case.

DWD 113.02(2)(d) (d) Given the evidence in the record or the nature of a decision at a lower level, or both, there is significant doubt that the department will prevail on appeal on one or more specific issues.

DWD 113.02(2)(e) (e) All or part of any interest liability was incurred as a result of undue delay on the part of the department such that there is valid reason to cancel that liability.

DWD 113.02(2)(f) (f) There are valid legal defenses of estoppel or laches against the department as to all or part of the determination.

DWD 113.02(3) (3) A settlement may be implemented by any of the following methods:

DWD 113.02(3)(a) (a) Under s. 108.10 (1), Stats., the department may amend any determination affected by the settlement before a hearing on the determination.

DWD 113.02(3)(b) (b) Under s. 108.10 (1), Stats., the department may set aside the applicable determination before a hearing on the determination and issue a new determination as necessary to reflect the terms of the settlement.

DWD 113.02(3)(c) (c) The department and the appellant may enter into a written stipulation which sets forth the terms of the settlement. The stipulation is subject to the requirements of s. DWD 140.12 (1).

DWD 113.02(3)(d) (d) The appellant may withdraw all or part of the appeal of the determination.

DWD 113.02 History History: Cr. Register, February, 1994, No. 458, eff. 3-1-94; CR 18-033: am. (1) (a), (b), (2) (intro.), (a) to (d), (f), (3) Register May 2019 No. 761, eff. 6-1-19.

DWD 113.025 DWD 113.025 Waiver of interest.

DWD 113.025(1) (1) Except as provided in s. DWD 113.02 or 113.03, the department may grant a waiver or decrease of interest owed by an employer if the employer satisfies all of the following conditions:

DWD 113.025(1)(a) (a) The employer pays the full payment of any taxes and assessments due within 30 days following resolution of all issues. Until the employer pays all of the correct amount of taxes and assessments due, the department may not waive or decrease any of the interest owed by the employer.

DWD 113.025(1)(b) (b) The employer files any wage or tax report due within 30 days following resolution of all issues. Until the employer files all of the wage or tax reports that are due, the department may not waive or decrease any of the interest owed by the employer.

DWD 113.025(1)(c) (c) The employer has no other outstanding reports, contributions, interest, penalties, or other fees due.

DWD 113.025(1)(d) (d) The employer was determined within the last year to be subject to ch. 108, Stats., or has a history of timely filing required reports, including wage and contribution reports, and of making payments in a timely manner.

DWD 113.025(1)(e) (e) The employer or a business for which the employer is a successor, under the requirements of s. 108.16 (8), Stats., has never received a waiver or decrease in interest charged under s. 108.22 (1) (a) or 108.17 (2c) (c), Stats.

DWD 113.025(1)(f) (f) There has not been a hearing on an appeal under s. 108.10, Stats., regarding the tax liability associated with the interest.

DWD 113.025(2) (2) If all of the conditions of sub. (1) are satisfied, the department may waive or decrease the interest charged under s. 108.22 (1) (a) or 108.17 (2c) (c), Stats., if the interest charged resulted from any of the following circumstances:

DWD 113.025(2)(a) (a) The employer failed to pay taxes or underpaid taxes by the required due date established by the department as a result of excusable neglect. An erroneous contention regarding the unemployment insurance law or misunderstanding of the obligations under the law shall not constitute excusable neglect.

DWD 113.025 Note Note: The following are examples of excusable neglect:

DWD 113.025 Note Embezzlement by an accountant or an employee who is not related to the employer such that the embezzlement caused the interest to be due.

DWD 113.025 Note Inaccurate written communication given to the employer by the Wisconsin Division of Unemployment Insurance that affirmatively misled the employer as to its duties and obligations such that the inaccurate written communication caused the interest to be due.

DWD 113.025(2)(b) (b) An inadvertent mathematical miscalculation by the employer of the amount of tax due resulting in a de minimis underpayment of taxes.

DWD 113.025(3) (3) A denial of a request for a waiver or decrease of interest under sub. (2) and s. 108.22 (1) (cm), Stats., is not an appealable decision.

DWD 113.025 History History: CR 13-106: cr. Register July 2014 No. 703, eff. 8-1-14; CR 18-033: am. (1) (c) to (f) Register May 2019 No. 761, eff. 6-1-19.

DWD 113.03 DWD 113.03 Compromise of employer liability.

DWD 113.03(1) (1) Under s. 108.10 (8), Stats., the department may compromise the liability of any employer as established in any final determination, decision or action, together with any subsequent collection costs, if all of the following apply:

DWD 113.03(1)(a) (a) The employer makes a sworn application for the compromise of the employer’s liability to the department, including a financial statement if requested, in a form prescribed by the department.

DWD 113.03(1)(b) (b) The employer is not a government unit.

DWD 113.03(1)(c) (c) The employer is not a debtor in a case under title 11 of the United States Code with respect to any liability under ch. 108, Stats., which is not dischargeable in bankruptcy unless any of the following apply:

DWD 113.03(1)(c)1. 1. In a case under chapter 7 of title 11 of the United States Code, there are insufficient assets to pay the liability in full under the statutory order of distribution.

DWD 113.03(1)(c)2. 2. In a case under chapter 11 or 12 of title 11 of the United States Code, the confirmed plan of reorganization provides for the sale of or distribution to creditors of all of the property of the employer and there are insufficient assets to pay the liability.

DWD 113.03(1)(d) (d) If the employer is a nonprofit organization that incurred all or part of its liability when it was subject to reimbursement financing status under s. 108.151 (2), Stats., the employer’s assurance of reimbursement has either been applied to the liability or the application for compromise provides for such assurance.

DWD 113.03(1)(e) (e) The department finds that the employer is unable to pay the full amount of the contributions or payments in lieu of contributions, interest, penalties and costs. If the employer is still in the same business or operation as when the liability sought to be compromised was incurred, and all of the following apply:

DWD 113.03(1)(e)1. 1. The employer’s application for compromise offers payment in an amount not less than the unpaid contributions or unpaid payments in lieu of contributions, including any contributions owed as a successor under s. 108.16 (8) (f), Stats.

DWD 113.03(1)(e)2. 2. The required payment of all interest, penalties or costs would pose an immediate threat to the financial viability of the employer.

DWD 113.03(1)(e)3. 3. The employer is paying all current contributions or payments in lieu of contributions.

DWD 113.03(2) (2) If the conditions of sub. (1) are satisfied, the department shall determine the amount that the employer is able to pay and may issue an acceptance of the application for compromise in the determined amount.

DWD 113.03(3) (3) Notwithstanding sub. (1) (e), the department may compromise unpaid contributions on wages for domestic service arising under s. 108.02 (13) (d), Stats., for any time period before the effective date of the existence of a fiscal agent or fiscal intermediary under s. 46.272 (7) (e) or 47.035, Stats.

DWD 113.03(4) (4) Notwithstanding sub. (1) (e), in determining the amount of the accepted compromise, the department may consider the following:

DWD 113.03(4)(a) (a) A portion of any interest liability was incurred as a result of undue delay on the part of the department such that there is valid reason to compromise the interest liability.

DWD 113.03(4)(b) (b) In the opinion of the bureau of legal affairs, the employer could have raised valid legal defenses of estoppel or laches against the department.

DWD 113.03 History History: Cr. Register, February, 1994, No. 458, eff. 3-1-94; CR 18-033: am. (1), (3), (4) (intro.), (a), (b) Register May 2019 No. 761, eff. 6-1-19: correction in (3) made under s. 13.92 (4) (b) 7., Stats., Register March 2023 No. 807.

DWD 113.04 DWD 113.04 Compromise of personal liability.

DWD 113.04(1) (1) The department may compromise the personal liability of a person whose liability for the unpaid contributions, interest, penalties and costs of an employer has been finally established under s. 108.22 (9), Stats., if all of the following apply: