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§ 281.8 31 CFR Ch.

II (7–1–05 Edition)

(b) All foreign exchange acquired by enhance consistency in reporting of


agencies by transfer from the Treasury foreign exchange operations by all
Department, without payment of dol- agencies. Agencies shall furnish such
lars, for the purpose of making author- reports and information as may be re-
ized expenditures, shall be placed with quired for the administration of the
accountable officers for account of the provisions of this circular.
agencies concerned.
(c) Unless otherwise authorized by § 281.9 General provisions.
the Secretary, no accountable officer (a) Nothing contained in this part
shall purchase foreign exchange which, shall be construed as having the effect
together with the balance on hand at of superseding or amending the provi-
the time of purchase, would exceed es- sions of any regulations issued or ap-
timated requirements for a thirty-day proved by the Secretary pursuant to
period. the Act of December 23, 1944, as amend-
(d) To the maximum extent possible, ed (67 Stat. 61).
foreign exchange accounts which are (b) The Secretary may waive, with-
earmarked for specific programs shall draw, or amend at any time or from
be maintained on an unfunded basis.
time to time any or all of the provi-
Each agency responsible for admin-
sions of the regulations of this part.
istering international agreements per-
(c) Implementing regulations within
taining to the use of foreign exchange
the framework of this circular will be
held in funded accounts shall review
issued by the Fiscal Assistant Sec-
the agreement and other consider-
ations relevant to each such account at retary of the Treasury. All communica-
least annually to determine if the ac- tions pertaining to the administration
count can be placed on an unfunded of the provisions of this part shall be
basis, and shall initiate appropriate ac- directed to the Fiscal Assistant Sec-
tion to accomplish the objective of retary.
minimizing the number of funded pro-
gram accounts and the amounts there- PART 285—DEBT COLLECTION AU-
in. The resulting determinations and THORITIES UNDER THE DEBT COL-
the status of actions undertaken shall LECTION IMPROVEMENT ACT OF
be furnished in writing to the Treasury 1996
Department within 60 days from the
date of this regulation and each time Subpart A—Disbursing Official Offset
thereafter that there is a change of sta-
tus of a particular account, or as re- Sec.
quested by the Treasury Department. 285.1 Collection of past-due support by ad-
Exchange which becomes eligible for ministrative offset.
removal from a funded status either as 285.2 Offset of tax refund payments to col-
lect past-due, legally enforceable nontax
a result of the foregoing determina-
debt.
tions, or because of the expiration of 285.3 Offset of tax refund payments to col-
the period of availability for restricted lect past-due support.
use under the terms of international 285.4 Offset of Federal benefit payments to
agreements, or for other reasons, shall collect past-due, legally enforceable
be released promptly by the program nontax debt.
agency for transfer to a nonrestricted 285.5 Centralized offset of Federal payments
Treasury sales account. to collect nontax debts owed to the
United States.
[26 FR 10054, Oct. 26, 1961, as amended at 29 285.7 Salary offset.
FR 11497, Aug. 11, 1964] 285.8 Offset of tax refund payments to col-
lect state income tax obligations.
§ 281.8 Reporting and accounting.
The Treasury Department will main- Subpart B—Authorities Other Than Offset
tain a system of central accounting
285.11 Administrative wage garnishment.
and reporting for the purpose of pro- 285.12 Transfer of debts to Treasury for col-
viding information on foreign exchange lection.
operations to the President, the Con- 285.13 Barring delinquent debtors from ob-
gress, and the public. The Treasury De- taining Federal loans or loan insurance
partment will also prescribe rules to or guarantees.

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Fiscal Service, Treasury § 285.1
AUTHORITY: 5 U.S.C. 5514; 26 U.S.C. 6402; 31 cludes the District of Columbia, Amer-
U.S.C. 321, 3701, 3711, 3716, 3719, 3720A, 3720B, ican Samoa, Guam, the United States
3720D; 42 U.S.C. 664; E.O. 13019, 61 FR 51763, 3 Virgin Islands, the Commonwealth of
CFR, 1996 Comp., p. 216.
the Northern Mariana Islands, and the
SOURCE: 62 FR 34179, June 25, 1997, unless Commonwealth of Puerto Rico.
otherwise noted.
Secretary means the Secretary of the
Treasury.
Subpart A—Disbursing Official (b) General rule. FMS may enter into
Offset a reciprocal agreement with a State for
the collection of past-due support being
§ 285.1 Collection of past-due support
by administrative offset. enforced by the State by administra-
tive offset from certain Federal pay-
(a) Definitions. For purposes of this ments. Upon notification of past-due
section: support either directly from a State
Administrative offset means with- which has entered into such an agree-
holding funds payable by the United ment or from HHS, disbursing officials
States (including funds payable by the of FMS or any other disbursing official
United States on behalf of a State gov- of the United States shall offset Fed-
ernment) to, or held by the United eral payments which are subject to off-
States for, a person to satisfy a debt.
set under this section, to collect past-
Debt as used in this section is syn-
due support. The amount offset, minus
onymous with the term past-due sup-
the offset fee, shall be forwarded to the
port.
State to be distributed in accordance
Disbursing official includes an official
with applicable laws and procedures.
who has authority to disburse public
money pursuant to 31 U.S.C. 3321 or an- (c) Agreements. FMS may enter into
other Federal law. reciprocal agreements with States for
FMS means the Financial Manage- disbursing officials of FMS and any
ment Service, a bureau of the Depart- other Federal disbursing official to off-
ment of the Treasury. FMS is the des- set certain Federal payments to collect
ignee of the Secretary of the Treasury past-due support being enforced by the
for all matters concerning this section, State. The agreement shall contain
unless otherwise specified. any requirements which FMS considers
HHS means the Department of Health appropriate to facilitate the offset and
and Human Services, Office of Child prevent duplicative efforts and shall
Support Enforcement. require States to prescribe procedures
Past-due support means the amount of governing the collection of past-due
support determined under a court support by Federal administrative off-
order, or an order of an administrative set. For purposes of this section, recip-
procedure established under State law, rocal means of mutual benefit. An
for support and maintenance of a child, agreement between FMS and a State to
or of a child and the parent with whom collect past-due support by offsetting
the child is living, which has not been Federal payments will be considered of
paid. The term child as used in this def- mutual benefit and it is not required
inition is not limited to minor chil- that States conduct administrative off-
dren. sets to collect debts owed to the Fed-
Past-due support being enforced by the eral Government. States which have
State means there has been an assign- entered into an agreement with FMS
ment of the support rights to the pursuant to this section may there-
State, or the State making the request after request, in the manner prescribed
for offset is providing services to indi- herein, that an offset be performed.
viduals pursuant to 42 U.S.C. 654(5) Such requests shall be made by the ap-
(section 454(5) of the Social Security propriate State disbursing official
Act), or the State is enforcing support which, for purposes of this section,
pursuant to a cooperative agreement means an appropriate official of the
with or by an Indian tribal govern- State agency which administers or su-
ment. pervises the administration of the
State means the several States of the State plan under Title IV-D of the So-
United States. The term State also in- cial Security Act.

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§ 285.1 31 CFR Ch. II (7–1–05 Edition)

(d) Notification to FMS of past-due sup- trative offset. The State may notify
port. (1) States notifying FMS of past- FMS or HHS of any increases in the
due support must do so in the manner amount of a debt referred for collection
and format prescribed by FMS. States by administrative offset provided the
notifying HHS of past-due support State has complied with the require-
must do so in the manner and format ments of paragraph (h) of this section
prescribed by HHS. HHS shall notify with regard to those amounts.
FMS of all past-due support referred to (h) Advance notification of intent to
HHS by States for collection by admin- collect by administrative offset. (1) The
istrative offset provided that the re- State, or FMS or HHS on behalf of the
quirements of paragraphs (d)(3) and (h) State, if the State requests and FMS or
of this section have been met. HHS agrees, shall send a written notifi-
(2) When a State has knowledge that cation, at least 30 days in advance of
past-due support is being enforced by referral of the debt for offset, to the in-
more than one State, the State noti- dividual owing past-due support, in-
fying FMS or HHS of the past-due sup- forming the individual that the State
port must inform any other State in- intends to refer the debt for collection
volved in enforcing the past-due sup- by administrative offset against Fed-
port when it refers the debt for offset eral payments. The notice must also
and when it receives the offset amount. inform the individual of:
(3) The notification of past-due sup- (i) The nature and amount of the
port must be accompanied by a certifi- debt; and
cation that the debt is past-due, legally (ii) The right to an administrative re-
enforceable, and that the State has view by the State referring the debt or,
complied with all the requirements as upon the request of the individual, by
set forth in paragraph (h) of this sec- the State with the order upon which
tion and with any requirements im- the referral was based, of the deter-
posed by State law or procedure. For mination of the State with respect to
debts so certified, the Secretary may the debt and of the procedures and
waive sections 552a (o) and (p) of Title time frames established by the State
5, United States Code, where applica- for such reviews.
ble, in accordance with the Secretary’s (2) Prior to referring a debt to FMS
authority under 31 U.S.C. 3716(f). for collection by administrative offset,
(4) FMS may reject a notification of States must provide individuals with a
past-due support which does not com- reasonable opportunity to exercise the
ply with the requirements of this sec- rights enumerated in paragraph (h)(1)
tion. The State will be notified of the of this section in accordance with pro-
rejection along with the reason for the cedures prescribed by the State.
rejection. (i) Payments subject to offset. Federal
(e) Minimum amount of past-due sup- payments subject to offset under this
port. FMS will reject a notification of section include all Federal payments
past-due support where the past-due except:
support owed is less than $25.00. This
(1) Payments due to an individual
amount may be adjusted from time to
under
time by FMS to ensure that the cost of
collection does not exceed the debt. (i) Title IV of the Higher Education
(f) Limitations. Debts properly sub- Act of 1965;
mitted to FMS for administrative off- (ii) The Social Security Act;
set will remain subject to collection by (iii) Part B of the Black Lung Bene-
administrative offset until withdrawn fits Act;
by the State provided the debt remains (iv) Any law administered by the
past-due and legally enforceable. Railroad Retirement Board;
(g) Notification of changes in status of (2) Payments which the Secretary de-
debt. The State notifying FMS or HHS termines are exempt from offset in ac-
of past-due support shall, in the man- cordance with paragraph (k) of this
ner and in the time frames provided by section;
FMS or HHS, notify FMS or HHS of de- (3) Payments from which collection
letions or decreases in the amount of a of past-due support by administrative
debt referred for collection by adminis- offset is expressly prohibited by law;

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Fiscal Service, Treasury § 285.1

(4) Payments made under the Inter- support include current basic pay, spe-
nal Revenue Code of 1986 (except that cial pay, incentive pay, retainer pay,
tax refund payments are subject to off- overtime, or in the case of an employee
set under separate authority); and not entitled to basic pay, other author-
(5) Payments made under the tariff ized pay. Aggregate disposable earnings
laws of the United States. for purposes of determining the max-
(j) Special provisions applicable to Fed- imum amounts which may be offset
eral salary payments. (1) Unless a lower under paragraph (j)(1) of this section is
maximum offset limitation is provided Federal salary pay remaining after the
by applicable State law, the maximum deduction of:
part of a Federal salary payment per (i) Any amount required by law to be
pay period subject to offset to collect withheld;
past-due support shall not exceed those (ii) Amounts properly withheld for
amounts set forth at section 1673(b)(2) Federal, State or local income tax pur-
(A) and (B) of Title 15, United States poses;
Code, as follows: (iii) Amounts deducted as health in-
(i) Fifty (50%) percent of the debtor’s surance premiums;
aggregate disposable earnings for any (iv) Amounts deducted as normal re-
pay period, where the debtor asserts by tirement contributions, not including
affidavit, or by other acceptable evi- amounts deducted for supplementary
dence, that he/she is supporting a coverage; and
spouse and/or dependent child, other (v) Amounts deducted as normal life
than the former spouse and/or child for insurance premiums not including
whom support is being collected, ex- amounts deducted for supplementary
cept that an additional five (5%) per- coverage.
cent will apply if it appears that such (4) At least 30 days in advance of off-
earnings are to enforce past-due sup- set, the disbursing official shall send
port for a period which is twelve (12) written notice to the debtor of the
weeks or more prior to the pay period maximum offset limitations described
to which the offset applies. A debtor in paragraph (j)(1) of this section. The
shall be considered to be supporting a notice shall include a request that the
spouse and/or dependent child only if debtor submit supporting affidavits or
the debtor provides over half of the other documentation necessary to de-
spouse’s and/or dependent child’s sup- termine the applicable offset percent-
port. age limitation. The notice shall also
(ii) Sixty (60%) percent of the debt- inform the debtor of the percentage
or’s aggregate disposable earnings for that will be deducted if he/she fails to
any pay period where the debtor fails submit the requested documentation.
to assert by affidavit or establish by (5) At the time the past-due support
other acceptable evidence that he/she debt is submitted for offset, the State
is supporting a spouse and/or dependent shall advise FMS or HHS if the max-
child, other than a former spouse and/ imum amount of a Federal salary pay-
or child for whom support is being col- ment that may be offset is less than
lected, except that an additional five the amount described under this para-
(5%) percent will apply if it appears graph.
that such earnings are to enforce past- (k) Payments exempt from administra-
due support for a period which is tive offset to collect past-due support
twelve (12) weeks or more prior to the being enforced by a State. The Secretary
pay period to which the offset applies. will exempt from administrative offset
(2) The maximum allowable offset under this part payments made under
amount shall be reduced by the amount means-tested programs when requested
of any deductions in pay resulting from by the head of the Federal agency
a garnishment order for support. Noth- which administers the program. For
ing in this rule is intended to alter purposes of this section, means-tested
rules applicable to processing garnish- programs are programs for which eligi-
ment orders for child support and/or al- bility is based on a determination that
imony. income and/or assets of the beneficiary
(3) Federal salary payments subject are inadequate to provide the bene-
to offset for the collection of past-due ficiary with an adequate standard of

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§ 285.1 31 CFR Ch. II (7–1–05 Edition)

living without program assistance. The Debts remain subject to collection by


Secretary may exempt from adminis- offset until paid in full.
trative offset under this section any (2) Disposition of amounts collected.
other class or type of payment upon FMS will transmit amounts collected
the written request of the head of the for debts, less fees charged under para-
agency which authorizes the payments. graph (l) of this section, to HHS or to
In determining whether or not to grant the appropriate State. If FMS learns
such exemptions, the Secretary shall that an erroneous offset payment has
give due consideration to whether ad- been made to HHS or any State, FMS
ministrative offset would tend to inter- will notify HHS or the appropriate
fere substantially with or defeat the State that an erroneous offset payment
purposes of the payment agency’s pro- has been made. FMS may deduct the
gram. amount of the erroneous offset pay-
(l) Fees. A fee which FMS has deter- ment from amounts payable to HHS or
mined to be sufficient to reimburse the State, as the case may be. Alter-
FMS for the full cost of the offset pro- natively, upon FMS’ request, the State
cedure, shall be deducted from each off- shall return promptly to the affected
set amount. FMS will notify the payee or FMS an amount equal to the
States, annually and in advance, of the amount of the erroneous payment (un-
amount of the fee to be charged for less the State previously has paid such
each offset. amounts, or any portion of such
(m) Offsetting payments—(1) Con- amounts, to the affected payee). HHS
ducting the offset. Disbursing officials of and States shall notify FMS any time
the Department of the Treasury, the HHS or a State returns an erroneous
Department of Defense, the United offset payment to an affected payee.
States Postal Service, or any other FMS and HHS, or the appropriate
Government corporation, any dis- State, will adjust their debtor records
bursing official of the United States accordingly.
designated by the Secretary, or any (n) Administrative offset priorities.
disbursing official of an executive de- When a payee/debtor owes more than
partment or agency that disburses Fed- one debt which has been referred to
eral payments shall offset payments FMS for collection by administrative
subject to offset under this section to offset, any offset by a disbursing offi-
satisfy, in whole or part, a debt owed cial will be applied first to past-due
by the payee. Disbursing officials shall support assigned to a State and will be
compare payment certification records applied to any other past-due support
with records of debts submitted to after any other reductions allowed by
FMS for collection by administrative law.
offset. A match will occur when the (o) Notification of offset. (1) Disbursing
taxpayer identifying number and name officials of FMS or any other dis-
control of a payment record are the bursing official which conducts an off-
same as the taxpayer identifying num- set will notify the payee in writing of
ber and name control of a debt record. the occurrence of the offset to satisfy
The taxpayer identifying number for past-due support. The notice shall in-
an individual is the individual’s social form the payee of the type and amount
security number. When a match occurs of the payment that was offset; the
and all other requirements for offset identity of the State which requested
have been met, the disbursing official the offset; and a contact point within
shall offset the payment to satisfy, in the State that will handle concerns re-
whole or part, the debt. Any amounts garding the offset. Disbursing officials
not offset shall be paid to the payee. shall not be liable for failure to provide
The amount that can be offset from a this notice.
single payment is the lesser of the (2) Disbursing officials of FMS or any
amount of the debt (including interest, other disbursing official which con-
penalties, and administrative costs); ducts an offset under this section will
the amount of the payment; or the share with HHS, upon request by the
amount of the payment available for Secretary of HHS, information con-
offset if a statute or regulation pro- tained in payment certification records
hibits offset of the entire amount. of persons who are delinquent in child

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Fiscal Service, Treasury § 285.2

support obligations that would assist owed by the payee(s) of a tax refund
in the collection of such debts. When payment.
no offset is conducted, disbursing offi- Tax refund payment means any over-
cials of FMS or any other disbursing payment of Federal taxes to be re-
official, will provide such information funded to the person making the over-
to HHS to the extent such information payment after the IRS makes the ap-
is available from offset activities con- propriate credits as provided in 26
ducted by FMS and other disbursing of- U.S.C. 6402(a) and 26 CFR 6402–3(a)(6)(i)
ficials. for any liabilities for any tax on the
(p) Liability of disbursing officials and part of the person who made the over-
payment agencies. Neither the dis- payment.
bursing official nor the agency author- (b) General rule. (1) A Federal agency
izing the payment shall be liable for (as defined in 26 U.S.C. 6402(g)) that is
the amount of the administrative off- owed by a person a past-due, legally en-
set on the basis that the underlying ob- forceable nontax debt shall notify FMS
ligation, represented by the payment of the amount of such debt for collec-
before the administrative offset was tion by tax refund offset. However, any
taken, was not satisfied. Disbursing of- agency subject to section 9 of the Act
ficials will notify the agency author- of May 18, 1933 (16 U.S.C. 831h) owed
izing the payment that the offset has such a debt may, but is not required to,
occurred so that the agency author- notify FMS of the amount of such debt
izing the payment may direct any in- for collection by tax refund offset.
quiries concerning the offset to the ap- (2) FMS will compare tax refund pay-
propriate State. ment records, as certified by the IRS,
[62 FR 36210, July 7, 1997, as amended at 63
with records of debts submitted to
FR 46145, Aug. 28, 1998] FMS. A match will occur when the tax-
payer identifying number (as that term
§ 285.2 Offset of tax refund payments is used in 26 U.S.C. 6109) and name (or
to collect past-due, legally enforce- derivation of the name, known as a
able nontax debt. ‘‘name control’’) of a payment certifi-
(a) Definitions. For purposes of this cation record are the same as the tax-
section: payer identifying number and name
Creditor agency means a Federal agen- control of a debtor record. When a
cy owed a claim that seeks to collect match occurs and all other require-
that claim through tax refund offset. ments for tax refund offset have been
Debt or claim refers to an amount of met, FMS will reduce the amount of
money, funds, or property which has any tax refund payment payable to a
been determined by an agency official debtor by the amount of any past-due,
to be due the United States from any legally enforceable debt owed by the
person, organization, or entity, except debtor. Any amounts not offset will be
another Federal agency. For the pur- paid to the payee(s) listed in the pay-
poses of this section, the terms ment certification record.
‘‘claim’’ and ‘‘debt’’ are synonymous (3) This section does not apply to any
and interchangeable and includes debt debt or claim arising under the Inter-
administered by a third party acting as nal Revenue Code.
an agent for the Federal Government. (4)(i) This section applies to Federal
Debtor means a person who owes a Old Age, Survivors and Disability In-
debt or claim. The term ‘‘person’’ in- surance (OASDI) overpayments pro-
cludes any individual, organization or vided the requirements of 31 U.S.C.
entity, except another Federal agency. 3720A(f)(1) and (2) are met with respect
FMS means the Financial Manage- to such overpayments.
ment Service, a bureau of the Depart- (ii) For purposes of this section,
ment of the Treasury. OASDI overpayment means any over-
IRS means the Internal Revenue payment of benefits made to an indi-
Service, a bureau of the Department of vidual under title II of the Social Secu-
the Treasury. rity Act (42 U.S.C. 401 et seq.).
Tax refund offset means withholding (5) A creditor agency is not precluded
or reducing a tax refund payment by an from using debt collection procedures,
amount necessary to satisfy a debt such as wage garnishment, to collect

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