80_FR_55931 80 FR 55751 - Offset of Tax Refund Payments To Collect Certain Debts Owed to States

80 FR 55751 - Offset of Tax Refund Payments To Collect Certain Debts Owed to States

DEPARTMENT OF THE TREASURY
Fiscal Service

Federal Register Volume 80, Issue 180 (September 17, 2015)

Page Range55751-55752
FR Document2015-23305

This final rule adopts the interim rule, published in the Federal Register on January 28, 2011, concerning the collection of delinquent State unemployment compensation debts through the offset of overpayments of Federal taxes.

Federal Register, Volume 80 Issue 180 (Thursday, September 17, 2015) 
[Federal Register Volume 80, Number 180 (Thursday, September 17, 2015)]
[Rules and Regulations]
[Pages 55751-55752]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-23305]


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DEPARTMENT OF THE TREASURY

Fiscal Service

31 CFR Part 285

RIN 1530-AA02


Offset of Tax Refund Payments To Collect Certain Debts Owed to 
States

AGENCY: Bureau of the Fiscal Service, Fiscal Service, Treasury.

ACTION: Final rule.

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SUMMARY: This final rule adopts the interim rule, published in the 
Federal Register on January 28, 2011, concerning the collection of 
delinquent State unemployment compensation debts through the offset of 
overpayments of Federal taxes.

DATES: This rule is effective September 17, 2015.

ADDRESSES: In accordance with the U.S. government's eRulemaking 
Initiative, the Bureau of the Fiscal Service publishes rulemaking 
information on http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Thomas Kobielus, Manager, Treasury 
Offset Program Debt Policy Branch, Treasury Offset Program Division, 
Debt Collection Program Management Directorate, Debt Management 
Services, Bureau of the Fiscal Service, at (202) 874-6810, or Michelle 
M. Cordeiro, Attorney, Office of Chief Counsel, Bureau of the Fiscal 
Service, at (202) 874-6680.

SUPPLEMENTARY INFORMATION:

I. Background

    This rule implements the authority added by the SSI Extension for 
Elderly and Disabled Refugees Act of 2008 (``2008 Act''), as amended by 
the Claims Resolution Act of 2010 (``2010 Act''), to offset 
overpayments of Federal taxes (referred to as ``tax refund offset'') to 
collect delinquent state unemployment compensation debts. The 
Department of the Treasury (``Treasury'') has incorporated the 
procedures necessary to collect state unemployment compensation debts 
as part of the Treasury Offset Program, a centralized offset program 
operated by Treasury's Bureau of the Fiscal Service (``Fiscal 
Service'').
    On January 28, 2011, Fiscal Service (then, the Financial Management 
Service) published an interim rule with request for comments at 76 FR 
5070, implementing this new authority. Specifically, this rule amended 
Fiscal Service regulations to include unemployment compensation debts 
among the types of state debts that may be collected by tax refund 
offset.

II. Summary of Comments Received and Treasury's Responses

    Treasury sought comments on all aspects of the proposed rule. 
Treasury received comments from one private company that provides 
worldwide tax services. The following is a discussion of the 
substantive issues raised in the comments.

1. Notice

    The commenter suggested that the rule provide guidelines to the 
states regarding how to notify debtor populations who may be affected 
by this rule. While this comment is outside the scope of this rule, 
Fiscal Service notes that this rule requires debtor-specific pre-offset 
notification (see 31 CFR 285.8(c)(3)(i)). The commenter also suggested 
that Fiscal Service mandate that states provide a pre-offset notice by 
certified mail, return receipt requested. In the 2010 Act, Congress 
explicitly removed this requirement in the case of unemployment 
compensation debt. Fiscal Service is unaware of any evidence that 
certified mail is more likely to reach the debtor than is regular first 
class mail, and notes that the cost of sending a notice by certified 
mail, return receipt requested, is high relative to sending a notice by 
regular first class mail. Therefore, Fiscal Service has not adopted 
this suggestion. As required by statute, however, notice must be sent 
by certified mail, return receipt requested prior to pursuing Federal 
tax refund offset to collect delinquent state income tax obligations.
    The commenter also suggested that Fiscal Service mandate that the 
notice to the debtor include certain details about the debt. Fiscal 
Service notes that, prior to submitting a debt to the Treasury Offset 
Program for tax refund offset purposes, a state is required to certify 
to Fiscal Service that it has provided the debtor with sufficient due 
process, including identification of the debt the state seeks to 
collect by offset. The information that must be provided may differ 
with the specific circumstances, and states may provide notice beyond 
what is specifically required by statute and regulation. Because 
identification of the debt is already required, Fiscal Service has not 
incorporated this suggestion.

2. Reasonable Efforts

    The commenter suggested that this rule provide specific actions 
that states should take and state what documentation they should retain 
to demonstrate that they have made reasonable efforts to collect a debt 
prior to pursuing Federal tax refund offset. The rule provides detail 
on what a reasonable effort includes--namely, making written demand on 
the debtor for payment and following state law and procedure. In 
addition, the rule was designed to provide flexibility because what 
constitutes a reasonable effort may differ based on the specific 
circumstances. Therefore, Fiscal Service believes that providing 
specific actions that states should take is unnecessary and not 
practicable and has not adopted this suggestion.

3. Central Repository for Information

    The commenter suggested that debtors be able to obtain information 
through a centralized location within the Treasury Offset Program Web 
site and through an automated telephone system on why their payment was 
offset and on state appeals processes. While this suggestion is outside 
the scope of this rule, Fiscal Service notes that debtors currently may 
access certain offset information through an automated telephone 
system. Fiscal Service further notes that it is exploring other self-
service options that would permit debtors to obtain information about 
their own debts.

4. Other Concerns

    The commenter suggested that the description of the required appeal 
process contain more detail. Fiscal Service is not aware of any 
additional detail that needs to be included and, therefore, has not 
made any changes to the rule based on this suggestion.
    The commenter also suggested that Fiscal Service consider extending 
the period of dispute to 90 days because debtors are unlikely to have 
retained records for long periods of time. Fiscal Service notes that 
several other delinquent debt collection tools provide a due process 
period of 60 days or fewer, including the offset of Federal nontax 
payments to collect Federal nontax debts (31 CFR 285.5(d)(6)(ii)(A)); 
the offset of Federal nontax payments to collect state debts (31 CFR 
285.6(e)(2)); the offset of Federal tax payments to collect Federal 
nontax debts (31 CFR 285.2(d)(1)(ii)(B)); and the

[[Page 55752]]

administrative garnishment of wages to collect Federal nontax debts (31 
U.S.C. 3720D(b)(2)). Moreover, Fiscal Service believes that an 
additional 30 days is not likely to help debtors locate and produce 
such records, and is not aware of any evidence that 60 days is 
insufficient. Given the time period for other debt collection tools, 
Fiscal Service believes it would be best to leave the interim rule 
unchanged.
    The commenter also expressed concern that lifting the 10-year time 
limitation will create burdens for Treasury's Internal Revenue Service, 
due to an increase in injured spouse claims. Fiscal Service is unaware 
of any evidence to support this concern. Fiscal Service further notes 
that the 10-year limitation was removed by statute.
Procedural Matters
    This rule is not a significant regulatory action as defined in 
Executive Order 12866. Because no notice of proposed rulemaking was 
required for this rule, the provisions of the Regulatory Flexibility 
Act (5 U.S.C. 601 et seq.) do not apply.
Federalism
    This rule has been reviewed under Executive Order 13132, 
federalism. This rule will not have substantial direct effects on 
states, on the relationship between the national government and the 
states, or on distribution of power and responsibilities among the 
various levels of government. Participation in the program governed by 
this rule is voluntary for the states; this rule only sets forth the 
general procedures for state participation. States already participate 
in offset of tax refunds to collect delinquent state income tax 
obligations pursuant to 31 CFR 285.8. This rule merely updates the 
regulations to reflect the statutory change authorizing states to 
submit additional debts to Treasury Offset Program for collection by 
tax refund offset. Therefore, in accordance with Executive Order 13132, 
it is determined that this rule does not have sufficient federalism 
implications to warrant the preparation of a federalism summary impact 
statement.
    For the reasons stated above, the interim rule amending 31 CFR 
285.8, published at 76 FR 5070, January 28, 2011, is adopted as final 
without change.

David A. Lebryk,
Fiscal Assistant Secretary.
[FR Doc. 2015-23305 Filed 9-16-15; 8:45 am]
BILLING CODE 4810-AS-P

Federal Register / Vol. 80, No. 180 / Thursday, September 17, 2015 / Rules and Regulations 55751 PART 938—PENNSYLVANIA Treasury Offset Program, a centralized what is specifically required by statute offset program operated by Treasury’s and regulation. Because identification of ■ 1. The authority citation for Part 938 Bureau of the Fiscal Service (‘‘Fiscal the debt is already required, Fiscal continues to read as follows: Service’’). Service has not incorporated this Authority: 30 U.S.C. 1201 et seq. On January 28, 2011, Fiscal Service suggestion. (then, the Financial Management § 938.16 [Amended] Service) published an interim rule with 2. Reasonable Efforts ■ 2. Section 938.16 is amended by request for comments at 76 FR 5070, The commenter suggested that this removing and reserving paragraph (h). implementing this new authority. rule provide specific actions that states Specifically, this rule amended Fiscal should take and state what [FR Doc. 2015–23118 Filed 9–16–15; 8:45 am] Service regulations to include documentation they should retain to BILLING CODE 4310–05–P unemployment compensation debts demonstrate that they have made among the types of state debts that may reasonable efforts to collect a debt prior be collected by tax refund offset. to pursuing Federal tax refund offset. DEPARTMENT OF THE TREASURY The rule provides detail on what a II. Summary of Comments Received reasonable effort includes—namely, Fiscal Service and Treasury’s Responses making written demand on the debtor Treasury sought comments on all for payment and following state law and 31 CFR Part 285 aspects of the proposed rule. Treasury procedure. In addition, the rule was RIN 1530–AA02 received comments from one private designed to provide flexibility because company that provides worldwide tax what constitutes a reasonable effort may Offset of Tax Refund Payments To services. The following is a discussion differ based on the specific Collect Certain Debts Owed to States of the substantive issues raised in the circumstances. Therefore, Fiscal Service comments. believes that providing specific actions AGENCY: Bureau of the Fiscal Service, Fiscal Service, Treasury. 1. Notice that states should take is unnecessary and not practicable and has not adopted ACTION: Final rule. The commenter suggested that the this suggestion. rule provide guidelines to the states SUMMARY: This final rule adopts the 3. Central Repository for Information regarding how to notify debtor interim rule, published in the Federal populations who may be affected by this The commenter suggested that debtors Register on January 28, 2011, rule. While this comment is outside the be able to obtain information through a concerning the collection of delinquent scope of this rule, Fiscal Service notes centralized location within the Treasury State unemployment compensation that this rule requires debtor-specific Offset Program Web site and through an debts through the offset of pre-offset notification (see 31 CFR automated telephone system on why overpayments of Federal taxes. 285.8(c)(3)(i)). The commenter also their payment was offset and on state DATES: This rule is effective September suggested that Fiscal Service mandate appeals processes. While this suggestion 17, 2015. that states provide a pre-offset notice by is outside the scope of this rule, Fiscal ADDRESSES: In accordance with the U.S. certified mail, return receipt requested. Service notes that debtors currently may government’s eRulemaking Initiative, In the 2010 Act, Congress explicitly access certain offset information the Bureau of the Fiscal Service removed this requirement in the case of through an automated telephone system. publishes rulemaking information on unemployment compensation debt. Fiscal Service further notes that it is http://www.regulations.gov. Fiscal Service is unaware of any exploring other self-service options that FOR FURTHER INFORMATION CONTACT: evidence that certified mail is more would permit debtors to obtain Thomas Kobielus, Manager, Treasury likely to reach the debtor than is regular information about their own debts. Offset Program Debt Policy Branch, first class mail, and notes that the cost Treasury Offset Program Division, Debt of sending a notice by certified mail, 4. Other Concerns Collection Program Management return receipt requested, is high relative The commenter suggested that the Directorate, Debt Management Services, to sending a notice by regular first class description of the required appeal Bureau of the Fiscal Service, at (202) mail. Therefore, Fiscal Service has not process contain more detail. Fiscal 874–6810, or Michelle M. Cordeiro, adopted this suggestion. As required by Service is not aware of any additional Attorney, Office of Chief Counsel, statute, however, notice must be sent by detail that needs to be included and, Bureau of the Fiscal Service, at (202) certified mail, return receipt requested therefore, has not made any changes to 874–6680. prior to pursuing Federal tax refund the rule based on this suggestion. SUPPLEMENTARY INFORMATION: offset to collect delinquent state income The commenter also suggested that tax obligations. Fiscal Service consider extending the I. Background The commenter also suggested that period of dispute to 90 days because This rule implements the authority Fiscal Service mandate that the notice to debtors are unlikely to have retained added by the SSI Extension for Elderly the debtor include certain details about records for long periods of time. Fiscal and Disabled Refugees Act of 2008 the debt. Fiscal Service notes that, prior Service notes that several other (‘‘2008 Act’’), as amended by the Claims to submitting a debt to the Treasury delinquent debt collection tools provide Resolution Act of 2010 (‘‘2010 Act’’), to Offset Program for tax refund offset a due process period of 60 days or offset overpayments of Federal taxes purposes, a state is required to certify to fewer, including the offset of Federal (referred to as ‘‘tax refund offset’’) to Fiscal Service that it has provided the nontax payments to collect Federal tkelley on DSK3SPTVN1PROD with RULES collect delinquent state unemployment debtor with sufficient due process, nontax debts (31 CFR 285.5(d)(6)(ii)(A)); compensation debts. The Department of including identification of the debt the the offset of Federal nontax payments to the Treasury (‘‘Treasury’’) has state seeks to collect by offset. The collect state debts (31 CFR 285.6(e)(2)); incorporated the procedures necessary information that must be provided may the offset of Federal tax payments to to collect state unemployment differ with the specific circumstances, collect Federal nontax debts (31 CFR compensation debts as part of the and states may provide notice beyond 285.2(d)(1)(ii)(B)); and the VerDate Sep<11>2014 16:04 Sep 16, 2015 Jkt 235001 PO 00000 Frm 00031 Fmt 4700 Sfmt 4700 E:\FR\FM\17SER1.SGM 17SER1

55752 Federal Register / Vol. 80, No. 180 / Thursday, September 17, 2015 / Rules and Regulations administrative garnishment of wages to DEPARTMENT OF DEFENSE are $10 million annually. This cost collect Federal nontax debts (31 U.S.C. includes administration costs; required 3720D(b)(2)). Moreover, Fiscal Service Office of the Secretary FBI fingerprint Investigations Child Care believes that an additional 30 days is National Agency Check and Inquiries not likely to help debtors locate and 32 CFR Part 86 checks ($125/NACI); State Criminal produce such records, and is not aware [Docket ID: DOD–2014–OS–0009] History Repository checks ($25/each of any evidence that 60 days is state the individual resided in); and insufficient. Given the time period for RIN 0790–AJ19 periodic reinvestigations. We do not other debt collection tools, Fiscal believe that this rule will impose Service believes it would be best to Background Checks on Individuals in substantial direct costs on state and leave the interim rule unchanged. DoD Child Care Services Programs local governments. AGENCY: Under Secretary of Defense for This rule is part of DoD’s The commenter also expressed Personnel and Readiness, DoD. retrospective plan, completed in August concern that lifting the 10-year time 2011, under Executive Order 13563, limitation will create burdens for ACTION: Final rule. ‘‘Improving Regulation and Regulatory Treasury’s Internal Revenue Service, SUMMARY: This rule establishes and Review.’’ DoD’s full plan and updates due to an increase in injured spouse updates policy, assigns responsibilities, can be accessed at: http:// claims. Fiscal Service is unaware of any and provides procedures to conduct www.regulations.gov/#!docketDetail;dct evidence to support this concern. Fiscal criminal history checks on individuals =FR+PR+N+O+SR;rpp=10;po=0;D Service further notes that the 10-year involved in the provision of child care =DOD-2011-OS-0036. limitation was removed by statute. services for children under the age of 18 Public Comments Procedural Matters in DoD programs. The Crime Control Act of 1990 (Act) requires all The Department of Defense published This rule is not a significant individuals involved with the provision a proposed rule in the Federal Register regulatory action as defined in of child care services to children under on October 1, 2014 (79 FR 59168–59173) Executive Order 12866. Because no the age of 18 undergo a criminal for a 60-day public comment period. We notice of proposed rulemaking was background check. ‘‘Child care services’’ received 22 comments. Five comments required for this rule, the provisions of include, but are not limited to, social expressed support for the rule and no the Regulatory Flexibility Act (5 U.S.C. services, health and mental health care, response is required. One comment was 601 et seq.) do not apply. child (day) care, education (whether or withdrawn. The remaining comments not directly involved in teaching), and are listed below. Federalism Comment ID DOD–2014–OS–0009– rehabilitative programs. Any conviction This rule has been reviewed under 0003: for a sex crime, an offense involving a • The law still states that any Executive Order 13132, federalism. This child victim, or a drug felony, may be conviction for a sex crime, an offense rule will not have substantial direct grounds for denying employment or for involving a child victim, or a drug effects on states, on the relationship dismissal of an employee providing any felony, may be grounds for denying between the national government and of the services discussed above. employment or for dismissal of an the states, or on distribution of power DATES: This rule is effective October 19, employee. Public Law 101–647. The and responsibilities among the various 2015. word may give too much flexibility in levels of government. Participation in FOR FURTHER INFORMATION CONTACT: the decision making process to hiring the program governed by this rule is Karen Morgan, 571–372–0859. agents in determining what to do with voluntary for the states; this rule only SUPPLEMENTARY INFORMATION: results of the background check. The sets forth the general procedures for review board may either bar state participation. States already Executive Summary employment based on the offenses listed participate in offset of tax refunds to The purpose of this regulatory action out in the statute or excuse the collect delinquent state income tax is to describe requirements for criminal background check results. Agency obligations pursuant to 31 CFR 285.8. history background checks, including processes should spell out more This rule merely updates the regulations reinvestigation, and self-reporting, for specifically which offenses are bars and to reflect the statutory change individuals involved with the provision which are not. authorizing states to submit additional of child care services. Response: The commenter has debts to Treasury Offset Program for The legal authorities for this rule referenced the summary paragraph at collection by tax refund offset. include: 5 U.S.C. 2105, 10 U.S.C. the beginning of the rule, which is not Therefore, in accordance with Executive chapter 47, 42 U.S.C. 13041. the rule itself. Please see § 86.6(c) for Order 13132, it is determined that this The major provisions of this specific criteria for automatic and rule does not have sufficient federalism regulatory action include providing presumptive disqualifiers, which does implications to warrant the preparation procedures for requirements for not use the term, ‘‘may.’’ of a federalism summary impact criminal history background checks • It is imperative that a thorough statement. listing the types of background checks, review, investigation and study of For the reasons stated above, the and descriptions of reinvestigation and different systems for background checks interim rule amending 31 CFR 285.8, self-reporting. is completed on each organization published at 76 FR 5070, January 28, This rule is intended to support the interacting with children. 2011, is adopted as final without workforce mission of the DoD and Response: This rule/policy was tkelley on DSK3SPTVN1PROD with RULES change. implement current law that covers developed in collaboration with the individuals expected to have regular Military Services, which are responsible David A. Lebryk, contact with children in the for providing detailed procedures that Fiscal Assistant Secretary. performance of child care services on a meet the overall DoD requirements in [FR Doc. 2015–23305 Filed 9–16–15; 8:45 am] DoD installation or DoD-sanctioned this rule to ensure the rule/policy is BILLING CODE 4810–AS–P program. The estimated costs of the rule implemented correctly. VerDate Sep<11>2014 16:04 Sep 16, 2015 Jkt 235001 PO 00000 Frm 00032 Fmt 4700 Sfmt 4700 E:\FR\FM\17SER1.SGM 17SER1


Document Created: 2015-12-15 09:34:21
Document Modified: 2015-12-15 09:34:21
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionRules and Regulations
ActionFinal rule.
DatesThis rule is effective September 17, 2015.
ContactThomas Kobielus, Manager, Treasury Offset Program Debt Policy Branch, Treasury Offset Program Division, Debt Collection Program Management Directorate, Debt Management Services, Bureau of the Fiscal Service, at (202) 874-6810, or Michelle M. Cordeiro, Attorney, Office of Chief Counsel, Bureau of the Fiscal Service, at (202) 874-6680.
FR Citation80 FR 55751 
RIN Number1530-AA02
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