approved purposes - Penalties. A. If the fiduciary organization receives evidence that monies withdrawn from IDAs are withdrawn under false pretenses or are used for purposes other than for the approved purposes indicated at the time of the withdrawal, the fiduciary organization shall make arrangements with the financial institution to impose a penalty of ten percent (10%) of the amount of the monies withdrawn or loss of matches and may, at its discretion, close the account. If the fiduciary organization is unable to impose the penalty specified herein, it shall notify the Oklahoma Tax Commission and the amount of such penalty shall be added to the income tax liability of the IDA account holder. All penalties collected by fiduciary organizations or the Tax Commission shall be deposited to the Individual Development Account Revolving Fund created pursuant to the provisions of Section 10 of this act. B. The amount of any withdrawal for purposes other than those set forth in Section 7 of this act, or any withdrawal for purposes other than for the approved purposes indicated at the time of the withdrawal, shall be taxed as income during the year in which the withdrawal is made. The fiduciary organization shall notify the Tax Commission of any such withdrawals made. C. The fiduciary organization shall establish a grievance committee and a procedure to hear, review, and decide in writing any grievance made by an IDA account holder who disputes a decision of the operating organization that a withdrawal is subject to penalty. D. Each fiduciary organization shall establish such regulations as are necessary, including prohibiting eligibility for further matching funds, to ensure compliance with this section.
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