[Federal Register Volume 76, Number 41 (Wednesday, March 2, 2011)]
[Proposed Rules]
[Pages 11402-11404]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-4586]
[[Page 11402]]
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SOCIAL SECURITY ADMINISTRATION
20 CFR Parts 404, 408, 416, and 422
[Docket No. SSA-2010-0010]
RIN 0960-AH19
Recovery of Delinquent Debts--Treasury Offset Program
Enhancements
AGENCY: Social Security Administration.
ACTION: Notice of proposed rulemaking.
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SUMMARY: We propose to amend our Tax Refund Offset (TRO) and
Administrative Offset regulations. We are conforming our regulations to
those of the Department of the Treasury (Treasury) for the following
reasons: (1) Treasury removed the 10-year limitation to collect
delinquent debts owed the United States by reducing eligible Federal
payments, and (2) more States are participating in reciprocal
agreements with Treasury to offset State payments, including tax
refunds to reduce or extinguish a federally owed debt.
The potential exists to increase collection of Federal debts for
two reasons: (1) We are authorized to collect debts indefinitely by
offsetting eligible Federal payments through the Treasury Offset
Program (TOP), and (2) States that have reciprocal agreements with
Treasury are authorized to offset payments to reduce or extinguish
debts owed to the Federal agencies.
DATES: To ensure that your comments are considered, we must receive
them no later than May 2, 2011.
ADDRESSES: You may submit comments by any one of three methods--
Internet, fax, or mail. Do not submit the same comments multiple times
or by more than one method. Regardless of which method you choose,
please state that your comments refer to Docket No. SSA-2010-0010 so
that we may associate your comments with the correct regulation.
Caution: You should be careful to include in your comments only
information that you wish to make publicly available. We strongly urge
you not to include in your comments any personal information, such as
Social Security numbers or medical information.
1. Internet: We strongly recommend that you submit your comments
via the Internet. Please visit the Federal eRulemaking portal at http://www.regulations.gov. Use the Search function to find docket number
SSA-2010-0010. The system will issue a tracking number to confirm your
submission. You will not be able to view your comment immediately
because we must post each comment manually. It may take up to a week
for your comment to be viewable.
2. Fax: Fax comments to (410) 966-2830.
3. Mail: Mail your comments to the Office of Regulations, Social
Security Administration, 107 Altmeyer Building, 6401 Security
Boulevard, Baltimore, Maryland 21235-6401.
Comments are available for public viewing on the Federal
eRulemaking portal at http://www.regulations.gov or in person, during
regular business hours, by arranging with the contact person identified
below.
FOR FURTHER INFORMATION CONTACT: Jennifer C. Pendleton, Office of
Payment and Recovery Policy, Social Security Administration, 6401
Security Boulevard, Baltimore, MD 21235-6401, (410) 965-5652. For
information on amendments to 20 CFR part 408, please contact: Benjamin
Franco, Office of International Programs, Social Security
Administration, 6401 Security Boulevard, Baltimore, MD 21235-6401,
(410) 965-7342. For information on eligibility or filing for benefits,
call our national toll-free number, 1-800-772-1213 or TTY 1-800-325-
0778, or visit our Internet site, Social Security Online, at http://www.socialsecurity.gov.
SUPPLEMENTARY INFORMATION:
Electronic Version
The electronic file of this document is available on the date of
publication in the Federal Register at http://www.gpoaccess.gov/fr/index.html.
Background
Due to increases in delinquent non-tax debt owed the United States,
the Debt Collection Improvement Act (DCIA) of 1996 was enacted. Public
Law 104-134, 110 Stat. 1321-358 et seq. (April 26, 1996).
The DCIA requires Federal agencies to refer delinquent non-tax
debts to the Treasury's Financial Management Services (FMS) to collect
non-tax payments. The DCIA authorizes Federal disbursing officials to
withhold or reduce eligible Federal payments to a payee for a
delinquent debt owed by that payee to the United States. This process
is known as ``administrative offset.''
FMS uses the TOP process to collect these delinquent debts. TOP's
delinquent debt matching and payment offset system results in an
administrative offset. Currently, to collect debts owed to us, TOP uses
the following types of administrative offset:
a. Tax Refund Offset (TRO). TOP reduces or withholds Federal income
tax refunds to recover delinquent titles II, VIII, and XVI debts.
b. Other administrative offset. TOP reduces or withholds payments
other than tax refunds, such as Federal travel and expense
reimbursements, to collect unrecoverable titles II and XVI debts. (The
use of other administrative offset is covered under regulations
separate from TRO.)
TOP identifies debtors and matches them against recipients of
Federal and State payments. These Federal and State payments are then
used to reduce the delinquent debt.
Existing Department of the Treasury Regulations
The Treasury's Fiscal Service published an interim rule with
request for comments on January 11, 2007. 72 FR 1283. In part, this
interim rule describes the requirements that apply to offset of certain
Federal non-tax payments to collect delinquent debts owed to the States
based on reciprocal agreements between Treasury and participating
States. Social Security, Special Veterans Benefits, and Supplemental
Security Income benefits are excluded from offset to satisfy a State
debt. 31 CFR 285.6(g)(1)(ii). The interim rule also provides for offset
of State payments to collect certain delinquent Federal non-tax debts.
Additionally, FMS launched a pilot program in Maryland and New
Jersey. This pilot program evaluated if the benefits of the offset
program outweighed its costs. FMS gathered information gained from this
pilot program, as well as comments received on the interim rule, before
issuing a final rule. On November 3, 2009, Treasury's Fiscal Service
published a final rule stating that it would proceed with the
reciprocal offset program with the States. 74 FR 56719. It intends to
expand this reciprocal program between Treasury and the States. This
expansion started with New York on January 20, 2010.
On June 11, 2009, Treasury's Fiscal Service simultaneously
published an NPRM and an interim final rule to remove the 10-year
limitation to collect outstanding non-tax debts by offset. 74 FR 27730,
27707. This change allows for collection of these debts without regard
to any time limitation. To avoid undue hardship, Treasury added a
requirement that debtors with debts outstanding more than 10 years on
or before June 11, 2009 be notified of the intent to offset and of all
applicable due process rights. This notification gives the debtor an
opportunity to dispute the debt, enter into a repayment agreement, or
possibly avoid offset.
[[Page 11403]]
On December 23, 2009, Treasury's Fiscal Service published a final
rule adopting the interim rule. No comments were received on the
interim rule. 74 FR 68149. On December 28, 2009, it also published a
final rule based on the NPRM cited above. Two comments were received on
the NPRM but no changes were made to that proposed rule, and it was
also adopted. 74 FR 68537.
Treasury's Fiscal Service published an amendment to correct the
date for offsetting tax refund payments to collect past-due non-tax
debt as of December 28, 2009. Non-tax debt, including delinquent debts
of 10 years or longer prior to December 28, 2009 will be collected by
tax refund offset.
Changes to Our Regulations
We propose to change our regulations to conform to the Treasury
regulations. In addition to collecting non-tax debts beyond the
original 10-year statute of limitations, we will now collect delinquent
titles II, VIII, and XVI overpayments by offset of various State
payments, including State tax refunds. DCIA of 1996, 31 U.S.C. 3716; 31
CFR 285.6.
Therefore, we propose changes to Sec. Sec. 404.520, 404.521,
408.940, 408.941, 416.580, 416.581, and 422.310. Under these sections,
we notify the overpaid person and refer overpayments to Treasury for
tax refund and administrative offset.
Clarity of These Rules
Executive Order 12866 as supplemented by Executive Order 13563
requires us to write all rules in plain language. In addition to your
substantive comments on this proposed rule, we invite your comments on
how to make rules easier to understand.
For example:
Would more, but shorter, sections be better?
Are the requirements in the rule clearly stated?
Have we organized the material to suit your needs?
Could we improve clarity by adding tables, lists, or
diagrams?
What else could we do to make the rule easier to
understand?
Does the rule contain technical language or jargon that is
not clear?
Would a different format make the rule easier to
understand, e.g. grouping and order of sections, use of headings,
paragraphing?
When will we start to use this rule?
We will not use this rule until we evaluate public comments and
publish a final rule in the Federal Register. Any final rule we issue
includes an effective date. We will continue to use our current rule
until that date. If we publish a final rule, we will include a summary
of those relevant comments we received along with responses and an
explanation of how we will apply the new rule.
Regulatory Procedures
Executive Order 12866 as Supplemented by Executive Order 13563
We consulted with the Office of Management and Budget (OMB) and
determined that this proposed rule meets the criteria for a significant
regulatory action under Executive Order 12866 as supplemented by
Executive Order 13563. Thus, OMB reviewed the proposed rule.
Regulatory Flexibility Act
We certify that this proposed rule will not have a significant
economic impact on a substantial number of small entities because it
applies to individuals only. Thus, a regulatory flexibility analysis is
not required under the Regulatory Flexibility Act, as amended.
Paperwork Reduction Act
This rule does not create any new or affect any existing
collections and does not require Office of Management and Budget
approval under the Paperwork Reduction Act.
List of Subjects
20 CFR Part 404
Administrative practice and procedure, Blind, Disability benefits,
Income taxes, Old-Age, Survivors, and Disability Insurance, Reporting
and recordkeeping requirements, Social Security.
20 CFR Part 408
Administrative practice and procedure; Aged; Reporting and
recordkeeping requirements; Social Security; Supplemental Security
Income (SSI); Veterans.
20 CFR Part 416
Administrative practice and procedure, Reporting and recordkeeping
requirements, Supplemental Security Income (SSI).
20 CFR Part 422
Administrative practice and procedure, Organization and functions
(Government agencies), Reporting and recordkeeping requirements, Social
Security.
Michael J. Astrue,
Commissioner of Social Security.
For the reasons set out in the preamble, we propose to amend 20 CFR
chapter III, parts 404, 408, 416, and 422 as set forth below:
PART 404--FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE
(1950- )
Subpart F--[Amended]
1. The authority citation for subpart F of part 404 is revised to
read as follows:
Authority: Secs. 204, 205(a), 702(a)(5), and 1147 of the Social
Security Act (42 U.S.C. 404, 405(a), 902(a)(5), and 1320b-17); 31
U.S.C. 3716; 31 U.S.C. 3720A.
2. Amend Sec. 404.520(b) by removing the word ``individuals'' and
adding in its place the word ``persons'' in the second sentence, and by
revising the third sentence to read as follows:
Sec. 404.520 Referral of overpayments to the Department of the
Treasury for tax refund offset--General.
* * * * *
(b) * * * We refer overpayments to the Department of the Treasury
for offset against Federal tax refunds regardless of the amount of time
the debts have been outstanding.
3. Amend Sec. 404.521 by revising the section heading,
introductory text, and paragraphs (a) and (b) to read as follows:
Sec. 404.521 Notice to overpaid persons.
Before we request that an overpayment be collected by reduction of
Federal and State income tax refunds, we will send a written notice of
our action to the overpaid person. In our notice of intent to collect
an overpayment through tax refund offset, we will state:
(a) The amount of the overpayment; and
(b) That we will collect the overpayment by requesting that the
Department of the Treasury reduce any amounts payable to the overpaid
person as refunds of Federal and State income taxes by an amount equal
to the amount of the overpayment unless, within 60 calendar days from
the date of our notice, the overpaid person:
(1) Repays the overpayment in full;
(2) Sends evidence to us at the address given in our notice that
(i) The overpayment is not past due; or
(ii) The overpayment is not legally enforceable; or
[[Page 11404]]
(3) Asks us to waive collection of the overpayment under section
204(b) of the Act.
* * * * *
PART 408--SPECIAL BENEFITS FOR CERTAIN WORLD WAR II VETERANS
Subpart I--[Amended]
4. The authority citation for subpart I of part 408 is revised to
read as follows:
Authority: Secs. 702(a)(5), 808, and 1147 of the Social
Security Act (42 U.S.C. 902(a)(5), 1008, and 1320b-17); 31 U.S.C.
3716, 3720A.
5. Amend Sec. 408.940(b) by revising the third sentence to read as
follows:
Sec. 408.940 When will we refer an SVB overpayment to the Department
of the Treasury for tax refund offset?
* * * * *
(b) * * * We refer overpayments to the Department of the Treasury
for offset against Federal tax refunds regardless of the amount of time
the debts have been outstanding.
6. Amend Sec. 408.941 by revising the introductory text, and
paragraphs (a) and (b) to read as follows:
Sec. 408.941 Will we notify you before we refer an SVB overpayment
for tax refund offset?
Before we request that an overpayment be collected by reduction of
Federal and State income tax refunds, we will send a written notice of
our action to the overpaid person. In our notice of intent to collect
an overpayment through tax refund offset, we will state:
(a) The amount of the overpayment; and
(b) That we will collect the overpayment by requesting that the
Department of the Treasury reduce any amounts payable to the overpaid
person as refunds of Federal and State income taxes by an amount equal
to the amount of the overpayment unless, within 60 calendar days from
the date of our notice, the overpaid person:
(1) Repays the overpayment in full;
(2) Sends evidence to us at the address given in our notice that
(i) The overpayment is not past due; or
(ii) The overpayment is not legally enforceable, or
(3) Asks us to waive collection of the overpayment under section
204(b) of the Act.
* * * * *
PART 416--SUPPLEMENTAL SECURITY INCOME FOR THE AGED, BLIND, AND
DISABLED
Subpart E--[Amended]
7. The authority citation for subpart E of part 416 is continues to
read as follows:
Authority: Secs. 702(a)(5), 1147, 1601, 1602, 1611(c) and (e),
and 1631(a)-(d) and (g) of the Social Security Act (42 U.S.C.
902(a)(5), 1320b-17, 1381, 1381a, 1382(c) and (e), and 1383(a)-(d)
and (g)); 31 U.S.C. 3716; 31 U.S.C. 3720A.
8. Amend Sec. 416.580(b) by removing the word ``individuals'' in
the second sentence and adding in its place ``persons'' and by revising
the last sentence to read as follows:
Sec. 416.580 Referral of overpayments to the Department of the
Treasury for tax refund offset--General.
* * * * *
(b) * * * We refer overpayments to the Department of the Treasury
for offset against Federal tax refunds regardless of the amount of time
the debts have been outstanding.
9. Amend Sec. 416.581 by revising the section heading, the
introductory text, and paragraphs (a) and (b), and in paragraph (e) by
removing the word ``individual'' in two places and adding in its place
``person''.
Sec. 416.581 Notice to overpaid person.
We will make a request for collection by reduction of Federal and
State income tax refunds only after we determine that a person owes an
overpayment that is past due and provide the overpaid person with
written notice. Our notice of intent to collect an overpayment through
tax refund offset will state:
(a) The amount of the overpayment; and
(b) That we will seek collection of the overpayment by requesting
that the Department of the Treasury reduce any amounts payable to the
overpaid person as refunds of Federal and State income taxes by an
amount equal to the amount of the overpayment unless, within 60
calendar days from the date of our notice, the overpaid person:
(1) Repays the overpayment in full;
(2) Sends evidence to us at the address given in our notice that
(i) The overpayment is not past due; or
(ii) The overpayment is not legally enforceable; or
(3) Asks us to waive collection of the overpayment under section
204(b) of the Act.
* * * * *
PART 422--ORGANIZATION AND PROCEDURES
Subpart D--[Amended]
10. The authority citation for subpart D of part 422 continues to
read as follows:
Authority: Secs. 204(f), 205(a), 702(a)(5), and 1631(b) of the
Social Security Act (42 U.S.C. 404(f), 405(a), 902(a)(5), and
1383(b)); 5 U.S.C. 5514; 31 U.S.C. 3711(e); 31 U.S.C. 3716.
11. Amend Sec. 422.310 by revising paragraphs (a)(1) and (b) to
read as follows:
Sec. 422.310 Collection of overdue debts by administrative offset.
(a) Referral to the Department of the Treasury for offset. (1) We
recover overdue debts by offsetting Federal and State payments due the
debtor through the Treasury Offset Program (TOP). TOP is a Government-
wide delinquent debt matching and payment offset process operated by
the Department of the Treasury, whereby debts owed to the Federal
Government are collected by offsetting them against Federal and State
payments owed the debtor. Federal payments owed the debtor include
current ``disposable pay,'' defined in 5 CFR 550.1103, owed by the
Federal Government to a debtor who is an employee of the Federal
Government. Deducting from such disposable pay to collect an overdue
debt owed by the employee is called ``Federal salary offset'' in this
subpart.
* * * * *
(b) Debts we refer. We refer for administrative offset all
qualifying debts that meet or exceed the threshold amounts used by the
Department of the Treasury for collection from State and Federal
payments, including Federal salaries.
* * * * *
[FR Doc. 2011-4586 Filed 3-1-11; 8:45 am]
BILLING CODE 4191-02-P