28 C.F.R. Subpart C—IRS Tax Refund Offset Provisions for Collection of Debts
Title 28 - Judicial Administration
Source: Order No. 1792–93, 58 FR 51223, Oct. 1, 1993, unless otherwise noted.
The provisions of 26 U.S.C. 6402(d) and 31 U.S.C. 3720A authorize the Secretary of the Treasury, acting through the Internal Revenue Service (IRS), to offset a delinquent debt owed to the United States Government from the tax refund due a taxpayer when other collection efforts have failed to recover the amount due. The purpose of these statutes is to improve the ability of the Government to collect money owed it while granting the debtor notice and certain other protections. This subpart authorizes the collection of debts owed to the United States Government by persons, organizations, and entities by means of offsetting any tax refunds due to the debtor by the IRS. It allows referral to the IRS for collection of debts that are past due and legally enforceable but not reduced to judgment and debts that have been reduced to judgment. (a) Debt. Debt means money owed by an individual, organization or entity from sources which include loans insured or guaranteed by the United States and all other amounts due the United States from fees, leases, services, overpayments, civil and criminal penalties, damages, interest, fines, administrative costs, and all other similar sources. A debt becomes eligible for tax refund offset procedures if it cannot currently be collected pursuant to the salary offset procedures of 5 U.S.C. 5514(a)(1) and is ineligible for administrative offset under 31 U.S.C. 3716(a) by reason of 31 U.S.C. 3716(c)(2), or cannot currently be collected by administrative offset under 31 U.S.C. 3716(a) against amounts payable to the debtor by the Department of Justice. A non-judgment debt is eligible for tax refund offset procedures if the Department's or the referring agency's right of action accrued more than three months but less than ten years before the offset is made. Judgment debts are eligible for referral at any time. Debts that have been referred to the Department of Justice by other agencies for collection are included in this definition. (b) Past due. All accelerated debts and all judgment debts are past due for purposes of this section. Such debts remain past due until paid in full. An accelerated debt is past due if, at the time of the notice required by §11.12(b), any part of the debt had been due, but not paid, for at least 90 days. Such an unaccelerated debt remains past due until paid to the current amount of indebtedness. (c) Notice. Notice means the information sent to the debtor pursuant to §11.12(b). The date of the notice is the date shown on the notice letter as its date of issuance. (d) Dispute. A dispute is a written statement supported by documentation or other evidence that all or part of an alleged debt is not past due or legally enforceable, that the amount is not the amount currently owed, that the outstanding debt has been satisfied, or, in the case of a debt reduced to judgment, that the judgment has been satisfied or stayed. (a) The Department may refer any past due, legally enforceable non-judgment debt of an individual, organization or entity to the IRS for offset if the Department's or the referring agency's rights of action accrued more than three months but less than ten years before the offset is made. Debts reduced to judgment may be referred at any time. Debts in amounts lower than $25.00 are not subject to referral. (b) The Department will provide the debtor with written notice of its intent to offset before initiating the offset. Notice will be mailed to the debtor at the current address of the debtor, as determined from information obtained from the IRS pursuant to 26 U.S.C. 6103(m)(2), (4), (5) or from information regarding the debt maintained by the Department of Justice. The notice sent to the debtor will state the amount of the debt and inform the debtor that: (1) The debt is past due; (2) The Department intends to refer the debt to the IRS for offset from tax refunds that may be due to the taxpayer; (3) The Department intends to provide information concerning the delinquent debt exceeding $100 to a consumer reporting bureau (credit bureau) unless such debt has already been disclosed; and (4) The debtor has 65 days from the date of notice in which to present evidence that all or part of the debt is not past due, that the amount is not the amount currently owed, that the outstanding debt has been satisfied, or, if a judgment debt, that the debt has been satisfied, or stayed, before the debt is reported to a consumer reporting agency, if applicable, and referred to the IRS for offset from tax refunds. (c) If the debtor neither pays the amount due nor presents evidence that the amount is not past due or is satisfied or stayed, the Department will report the debt to a consumer reporting agency at the end of the notice period, if applicable, and refer the debt to the IRS for offset from the taxpayer's federal tax refund. (d) A debtor may request a review by the Department if the debtor believes that all or part of the debt is not past due or is not legally enforceable, or, in the case of a judgment debt, that the debt has been stayed or the amount satisfied, as follows: (1) The debtor must send a written request for review to the address provided in the notice. (2) The request must state the amount disputed and the reasons why the debtor believes that the debt is not past due, is not legally enforceable, has been satisfied, or, if a judgment debt, has been satisfied or stayed. (3) The request must include any documents that the debtor wishes to be considered or state that additional information will be submitted within the time permitted. (4) If the debtor wishes to inspect records establishing the nature and amount of the debt, the debtor must request an opportunity for such an inspection in writing. The office holding the relevant records shall make them available for inspection during normal business hours. (5) The request for review and any additional information submitted pursuant to the request must be received by the Department at the address stated in the notice within 65 days of the date of issuance of the notice. (6) The Department will review disputes and shall consider its records and any documentation and arguments submitted by the debtor. The Department's decision to refer to the IRS any disputed portion of the debt shall be made by the Assistant Attorney General for Administration of his designee, who shall hold a position at least one supervisory level above the person who made the decision to offset the debt. The Department shall send a written notice of its decision to the debtor. There is no administrative appeal of this decision. (7) If the evidence presented by the debtor is considered by a non-Departmental agent or other entities or persons acting on the Department's behalf, the debtor will be accorded at least 30 days from the date the agent or other entity or person determines that all or part of the debt is past-due and legally enforceable to request review by an officer or employee of the Department of any unresolved dispute. (8) Any debt that previously has been reviewed pursuant to this section or any other section of this part, or that has been reduced to a judgment, may not be disputed except on the grounds of payments made or events occurring subsequent to the previous review of judgment. (e) The Department will notify the IRS of any change in the amount due promptly after receipt of payments or notice of other reductions. (f) In the event that more than one debt is owed, the IRS refund offset procedure will be applied in the order in which the debts became past due.
Title 28: Judicial Administration
PART 11—DEBT COLLECTION
Subpart C—IRS Tax Refund Offset Provisions for Collection of Debts
§ 11.10 Scope.
§ 11.11 Definitions.
§ 11.12 Procedures.
