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PART REFERRAL OF DEBT TO IRS FOR TAX REFUND

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					                                 Department of Health and Human Services                                                              § 31.2

                                 does not exceed $100,000) or the Depart-                      not report debts to the IRS except for
                                 ment of Justice (if the debt exceeds                          the purpose of using the offset proce-
                                 $100,000).                                                    dures described in §§ 31.1 through 31.11.
                                                                                               Debts of less than $25.00, exclusive of
                                 § 30.35 GAO exceptions.                                       interest and other charges, will not be
                                    The Secretary will refer to the Gen-                       reported.
                                 eral Accounting Office (GAO) debts                               (d) If not legally enforceable because
                                 arising from GAO audit exceptions.                            of the lapse of the statute of limita-
                                                                                               tions but otherwise valid, a debt
                                  PART 31—REFERRAL OF DEBT TO IRS                              amounting to over $600 will be reported
                                       FOR TAX REFUND OFFSET                                   to the IRS as a discharged debt on
                                                                                               Form 1099G. (Form 1099G is an informa-
                                 Sec.                                                          tion return which government agencies
                                 31.1 Scope.
                                 31.2 Notice of requirements before offset.
                                                                                               file with the IRS to report discharged
                                 31.3 Review within the Department of a de-                    debt, and the discharged amount is
                                     termination that an amount is past due                    considered as income to the taxpayer.)
                                     and legally enforceable.                                  [See § 31.9; 45 CFR 30.31(b).]
                                 31.4 Determination of the hearing officer.
                                 31.5 Review of departmental records related                   § 31.2 Notice of requirements before
                                     to the debt.                                                   offset.
                                 31.6 Stay of offset.
                                 31.7 Application of offset funds: Single debt.                  A request for reduction of an IRS tax
                                 31.8 Application of offset funds: Multiple                    refund will be made only after the Sec-
                                     debts.                                                    retary makes a determination that an
                                 31.9 Application of offset funds: Tax refund
                                     insufficient to cover amount of debt.
                                                                                               amount is owed and past due and pro-
                                 31.10 Time limitation for notifying the IRS                   vides the debtor with 60 calendar days
                                     to request offset of tax refunds due.                     written notice. The Department’s No-
                                 31.11 Correspondence with the Department.                     tice of Intent to Collect by IRS Tax Re-
                                   AUTHORITY: 31 U.S.C. 3711, 3716, 3718; Sec-                 fund Offset (Notice of Intent) will
                                 tion 2653 of the Deficit Reduction Act (31                    state:
                                 U.S.C. 3720A); 26 CFR 301.6402–6T; and 45 CFR                   (a) The nature and amount of the
                                 Part 30.                                                      debt;
                                   SOURCE: 53 FR 25593, July 8, 1988, unless                     (b) That unless the debt is repaid
                                 otherwise noted.                                              within 60 calendar days from the date
                                 § 31.1 Scope.                                                 of the Department’s Notice of Intent,
                                                                                               the Secretary intends to collect the
                                    (a) The standards set forth in §§ 31.1                     debt by requesting the IRS to reduce
                                 through 31.11 are the Department’s pro-                       any amounts payable to the debtor as
                                 cedures for requesting the Internal
                                                                                               refunds of Federal taxes paid by an
                                 Revenue Service (IRS) to offset tax re-
                                                                                               amount equal to the amount of the
                                 funds due taxpayers who have a past
                                                                                               debt and all accumulated interest and
                                 due debt obligation to the Department.
                                 These procedures are authorized by the                        other charges;
                                 Deficit Reduction Act of 1984 (31 U.S.C.                        (c) That the debtor has a right to ob-
                                 3720A), as implemented by regulation                          tain review, within the Department, of
                                 at 26 CFR 301.6402–6T, and apply to the                       the Secretary’s initial determination
                                 collection of debts as authorized by                          that the debt is past due and legally
                                 common law, by 31 U.S.C. 3716, or under                       enforceable (See § 31.3); and
                                 other statutory authority.                                      (d) That the debtor has a right to in-
                                    (b) The Secretary will use the IRS                         spect and copy departmental records
                                 tax refund offset to collect claims                           related to the debt as determined by
                                 which are liquidated or certain in                            the Secretary and will be informed as
                                 amount, past due and legally enforce-                         to where and when the inspection and
                                 able, and which are eligible for tax re-                      copying can be done after the Depart-
                                 fund offset under regulations issued by                       ment receives notice from the debtor
                                 the Secretary of the Treasury.                                that inspection and copying are re-
                                    (c) Except as provided in paragraph                        quested (See § 31.5).
                                 (d) of this section, the Secretary will


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                                 § 31.3                                                            45 CFR Subtitle A (10–1–03 Edition)

                                 § 31.3 Review within the Department                           cludes the supporting rationale for the
                                      of a determination that an amount                        decision. The decision of the hearing
                                      is past due and legally enforceable.                     officer concerning whether a debt or
                                    (a) Notification by debtor. A debtor                       part of a debt is past due and legally
                                 who receives a Notice of Intent has the                       enforceable is the final agency decision
                                 right to present evidence that all or                         with respect to the past due status and
                                 part of the debt is not past due or not                       enforceability of the debt.
                                 legally enforceable. To exercise this                           (b) Copies of the hearing officer’s de-
                                 right, the debtor shall send a letter no-                     cision will be distributed to the des-
                                 tifying the applicable delegatee of the                       ignated claims officer, the Depart-
                                 HHS Departmental Claims Officer spec-                         ment’s Office of the Assistant Sec-
                                 ified in § 31.11 that the debtor intends                      retary for Management and Budget,
                                 to present evidence to a designated                           the debtor, and the debtor’s attorney
                                 hearing officer. The letter must be re-                       or other representative, if any.
                                 ceived by such designated claims offi-                          (c) If the hearing officer’s decision af-
                                 cer within 60 calendar days from the                          firms that all or part of the debt is past
                                 date of the Department’s Notice of In-                        due and legally enforceable, the Sec-
                                 tent.                                                         retary will notify the IRS after the
                                    (b) Submission of evidence. The debtor                     hearing officer’s determination has
                                 may submit evidence showing that all                          been issued under paragraph (a) of this
                                 or part of the debt is not past due or                        section and a copy of the determina-
                                 not legally enforceable along with the                        tion is received by the Department’s
                                 notification required by paragraph (a)                        Office of the Assistant Secretary for
                                 of this section. Failure to submit the                        Management and Budget. No referral
                                 notification and evidence within 60 cal-                      will be made to the IRS if review of the
                                 endar days will result in an automatic                        debt by the hearing officer reverses the
                                 referral of the debt to the IRS without                       initial decision that the debt is past
                                 further action. Evidence submitted by                         due and legally enforceable.
                                 a debtor who has requested prior re-
                                 view of a claim under 45 CFR part 30                          § 31.5 Review of departmental records
                                                                                                    related to the debt.
                                 will not be reconsidered unless such
                                 evidence raises a new defense not con-                           (a) Notification by debtor. A debtor
                                 sidered in connection with such prior                         who intends to inspect or copy depart-
                                 review.                                                       mental records related to the debt as
                                    (c) Review of the record. After a time-                    determined by the Secretary must send
                                 ly submission of evidence by the debt-                        a letter to the designated claims offi-
                                 or, the claims officer will submit such                       cer stating the debtor’s intention. The
                                 evidence to a designated hearing offi-                        letter must be received by the des-
                                 cer, who will review all material re-                         ignated claims officer within 60 cal-
                                 lated to the debt which is in possession                      endar days from the date of the Depart-
                                 of the Department. The hearing officer                        ment’s Notice of Intent.
                                 shall make a determination based upon                            (b) Department’s response. In response
                                 a review of the written record, except                        to timely notification by the debtor as
                                 that the hearing officer may order an                         described in paragraph (a) of this sec-
                                 oral hearing if the officer finds that:                       tion, the designated claims officer will
                                    (1) An applicable statute authorizes                       notify the debtor of the location and
                                 or requires the Secretary to consider                         time when the debtor may inspect or
                                 waiver of the indebtedness and the                            copy departmental records related to
                                 waiver determination turns on credi-                          the debt. At his or her discretion, the
                                 bility or veracity; or                                        designated claims officer may also
                                    (2) The question of indebtedness can-                      mail copies of the debt-related records
                                 not be resolved by review of the docu-                        to the debtor.
                                 mentary evidence.
                                                                                               § 31.6 Stay of offset.
                                 § 31.4 Determination of the hearing of-                          If the debtor timely notifies the Sec-
                                      ficer.                                                   retary that the debtor is exercising a
                                    (a) Following the hearing or the re-                       right described in § 31.3(a) and timely
                                 view of the record, the hearing officer                       submits evidence pursuant to § 31.3(b),
                                 shall issue a written decision which in-                      any notice to the IRS will be stayed

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                                 Department of Health and Human Services                                                               § 31.11

                                 until the issuance of a written decision                      by the officials of the Department who
                                 by the hearing officer which deter-                           were responsible for discovering and
                                 mines that a debt or part of a debt is                        collecting such debts.
                                 past due and legally enforceable.                               (b) When the debt first accrued is de-
                                                                                               termined according to existing law re-
                                 § 31.7 Application of offset funds: Sin-                      garding the accrual of debts. (See, for
                                      gle debt.                                                example, 28 U.S.C. 2415.)
                                   If the debtor does not timely notify
                                 the Secretary that the debtor is exer-                        § 31.11 Correspondence with the De-
                                 cising a right described in § 31.3, the                            partment.
                                 Secretary will notify the IRS of the                             (a) All correspondence from the debt-
                                 debt 60 calendar days from the date of                        or to the Secretary concerning the
                                 the Department’s Notice of Intent, and                        right to review as described in § 31.3
                                 will request that the amount of the                           shall be addressed to the appropriate
                                 debt be offset against any amount pay-                        office of the Department at the fol-
                                 able by the IRS as refund of Federal                          lowing locations:
                                 taxes paid. Normally, recovered funds                         Office of the Secretary: Office of Financial Op-
                                 will be applied first to any special                            erations, Room 705D, Humphrey Building,
                                 charges provided for in HHS regula-                             200 Independence Avenue SW., Washington,
                                 tions or contracts, then to interest,                           DC 20201
                                 and finally, to the principal owed by                         Public Health Service: PHS Claims Office,
                                 the debtor.                                                     Room 18–20, Parklawn Building, 5600 Fish-
                                                                                                 ers Lane, Rockville, Maryland 20857
                                 § 31.8 Application of offset funds: Mul-                      Social Security Administration: SSA Claims Of-
                                      tiple debts.                                               fice, P.O. Box 17042, Baltimore, Maryland
                                                                                                 21235
                                   The Secretary will use the proce-                           Health Care Financing Administration: CMS
                                 dures set out in § 31.7 for the offset of                       Claims Office, Division of Accounting, P.O.
                                 multiple debts. However, when col-                              Box 17255, Baltimore, Maryland 21203
                                 lecting on multiple debts the Secretary                       Family Support Administration: FSA Claims
                                 will apply the recovered amounts                                Office, Switzer Building, Room 2222, 330 C
                                 against the debts in order in which the                         Street SW., Washington, DC 20201
                                                                                               Region I: Office of the General Counsel, John
                                 debts accrued.                                                  F. Kennedy Federal Building, Room 2047,
                                                                                                 Boston, Massachusetts 02203
                                 § 31.9 Application of offset funds: Tax                       Region II: Office of the General Counsel,
                                      refund insufficient to cover amount                        Jacob K. Javits Federal Building, Room
                                      of debt.                                                   3908, New York, New York 10278
                                   If a tax refund is insufficient to sat-                     Region III: Office of the General Counsel, 3535
                                 isfy a debt in a given tax year, the Sec-                       Market Street, Room 9100, P.O. Box 13716,
                                 retary will recertify to the IRS on the                         Philadelphia, Pennsylvania 19101
                                                                                               Region IV: Office of the General Counsel, 101
                                 following year to collect further on the
                                                                                                 Marietta Tower, Room 221, Atlanta, Geor-
                                 debt. If, in the following year, the debt                       gia 30323
                                 has become legally unenforceable be-                          Region V: Office of the General Counsel, 18th
                                 cause of the lapse of the statute of lim-                       Floor, 300 South Wacker Drive, Chicago, Il-
                                 itations, the debt will be reported to                          linois 60606
                                 the IRS as a discharged debt in accord-                       Region VI: Office of the General Counsel, 1200
                                 ance with § 31.1(d) and 45 CFR 30.31(b).                        Main Tower, Room 1330, Dallas, Texas 75202
                                                                                               Region VII: Office of the General Counsel, 601
                                 § 31.10 Time limitation for notifying                           East 12th Street, Room 535, Kansas City,
                                      the IRS to request offset of tax re-                       Missouri 64106
                                      funds due.                                               Region VIII: Office of the General Counsel,
                                                                                                 1961 Stout Street, Room 1106, Denver, Colo-
                                   (a) The Secretary may not initiate                            rado 80294
                                 offset of tax refunds due to collect a                        Region IX: Office of the General Counsel, 50
                                 debt for which authority to collect                             United Nations Plaza, Room 420, San Fran-
                                 arises under 31 U.S.C. 3716 more than 10                        cisco, California 94102
                                 years after the Secretary’s right to col-                     Region X: Office of the General Counsel, 2901
                                 lect the debt first accrued, unless facts                       3rd Avenue, Room 580, Seattle, Wash-
                                                                                                 ington, 98121.
                                 material to the Secretary’s right to
                                 collect the debt were not known and                             (b) All other correspondence shall be
                                 could not reasonably have been known                          addressed to the appropriate office as

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                                 Pt. 32                                                            45 CFR Subtitle A (10–1–03 Edition)

                                 described in paragraph (a) of this sec-                     lection remedies, including the offset
                                 tion. All requests for review of depart-                    of Federal payments to satisfy delin-
                                 mental records must be marked: Atten-                       quent non-tax debt owed to the United
                                 tion: Records Inspection Request.                           States. The Department may pursue
                                                                                             such debt collection remedies sepa-
                                   PART 32—ADMINISTRATIVE WAGE                               rately or in conjunction with adminis-
                                           GARNISHMENT                                       trative wage garnishment.
                                                                                               (5) This part does not apply to the
                                 Sec.                                                        collection of delinquent non-tax debts
                                 32.1      Purpose and scope.                                owed to the United States from the
                                 32.2      Definitions.                                      wages of Federal employees from their
                                 32.3      General rule.                                     Federal employment. Federal pay is
                                 32.4      Notice.                                           subject to the Federal salary offset
                                 32.5      Hearing.
                                                                                             procedures set forth in 5 U.S.C. 5514 and
                                 32.6      Withholding order.
                                 32.7      Certification by employer.                        other applicable laws.
                                 32.8      Amounts withheld.                                   (6) Nothing in this part requires the
                                 32.9      Financial hardship.                               Department to duplicate notices or ad-
                                 32.10      Refunds.                                         ministrative proceedings required by
                                 32.11      Ending garnishment.                              contract or other laws or regulations.
                                 32.12      Right of action.
                                   AUTHORITY: 31 U.S.C. 3720D, 5 U.S.C. 552,                 § 32.2 Definitions.
                                 553, E.O. 12866, 12988, 13808.                                 In this part, unless the context oth-
                                   SOURCE: 68 FR 15093, Mar. 28, 2003, unless                erwise requires:
                                 otherwise noted.                                               Business day means Monday through
                                                                                             Friday. For purposes of computation,
                                 § 32.1 Purpose and scope.                                   the last day of the period will be in-
                                    (a) Purpose. This part prescribes the                    cluded unless it is a Federal legal holi-
                                 standards and procedures for the De-                        day, in which case the next business
                                 partment to collect money from a                            day following the holiday will be con-
                                 debtor’s disposable pay by means of ad-                     sidered the last day of the period.
                                 ministrative wage garnishment to sat-                          Certificate of service means a certifi-
                                 isfy delinquent non-tax debts owed to                       cate signed by an employee of the De-
                                 the United States.                                          partment indicating the nature of the
                                    (b) Authority. These standards and                       document to which it pertains, the
                                 procedures are authorized under the                         date of mailing of the document, and to
                                 wage garnishment provisions of the                          whom it is being sent.
                                 Debt Collection Improvement Act of                             Day means calendar day. For pur-
                                 1996, codified at 31 U.S.C. 3720D, and the                  poses of computation, the last day of
                                 Department of the Treasury Adminis-                         the period will be included unless it is
                                 trative Wage Garnishment Regulations                        a Saturday, Sunday, or a Federal legal
                                 at 31 CFR 285.11.                                           holiday, in which case the next busi-
                                    (c) Scope. (1) This part applies to all                  ness day will be considered the last day
                                 Departmental Operating Divisions and                        of the period.
                                 Regional Offices that administer a pro-                        Debt or claim means an amount of
                                 gram that gives rise to a delinquent                        money, funds, or property that has
                                 non-tax debt owed to the United States                      been determined by the Secretary to be
                                 and to all officers or employees of the                     owed to the United States by an indi-
                                 Department authorized to collect such                       vidual, including debt administered by
                                 debt.                                                       a third party as an agent of the Federal
                                    (2) This part shall apply notwith-                       Government. A debt or claim includes,
                                 standing any provision of State law.                        but is not limited to: amounts owed on
                                    (3) Nothing in this part precludes the                   account of loans made, insured or guar-
                                 compromise of a debt or the suspension                      anteed by the Federal Government, in-
                                 or termination of collection action in                      cluding any deficiency or difference be-
                                 accordance with part 30 of this title, or                   tween the price obtained by the Fed-
                                 other applicable law or regulation.                         eral Government upon selling the prop-
                                    (4) The receipt of payments pursuant                     erty and the amount owed to the Fed-
                                 to this part does not preclude the De-                      eral Government; overpayments to pro-
                                 partment from pursuing other debt col-                      gram beneficiaries; any amount the

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