[Code of Federal Regulations]
[Title 13, Volume 1]
[Revised as of January 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 13CFR140.2]

[Page 469]
 
                TITLE 13--BUSINESS CREDIT AND ASSISTANCE
 
                CHAPTER I--SMALL BUSINESS ADMINISTRATION
 
PART 140--DEBT COLLECTION THROUGH OFFSET--Table of Contents
 
Sec. 140.2  What is a debt and how can the SBA collect it through offset?

    (a) A debt means an amount owed to the United States from loans made 
or guaranteed by the United States, and from fees, leases, rents, 
royalties, services, sales of real or personal property, overpayments, 
fines, penalties, damages, interest, forfeitures, or any other source. 
You are a debtor if you owe an amount to the United States from any of 
these sources.
    (b) SBA may collect past-due debts through offset by using any of 
three procedures: administrative offset, salary offset, or IRS tax 
refund offset. A past-due debt is one which has been reduced to 
judgment, has been accelerated, or has been due for at least 90 days.
    (1) Administrative offset. SBA may withhold money it owes to the 
debtor in order to satisfy the debt. This procedure is an 
``administrative offset'' and is authorized by 31 U.S.C. 3716.
    (2) Salary offset. If the debtor is a federal employee (a civilian 
employee as defined by 5 U.S.C. 2105, an employee of the U.S. Postal 
Service or Postal Rate Commission, or a member of the Uniformed Services 
or Reserve of the Uniformed Services), SBA may deduct payments owed to 
SBA or another federal agency from the debtor's paycheck. This procedure 
is a ``salary offset'' and is authorized by 5 U.S.C. 5514.
    (i) Any amount deducted from salary in any one pay period will not 
exceed 15 percent of a debtor's disposable pay, unless the debtor agrees 
in writing to a greater percentage.
    (ii) SBA also may collect against travel advances, training 
expenses, disallowed payments, retirement benefits, or any other amount 
due the employee, including lump-sum payments.
    (iii) If an employee has terminated employment after salary offset 
has been initiated, there are no limitations on the amount that can be 
withheld or offset.
    (3) IRS tax refund offset. SBA may request that IRS reduce a 
debtor's tax refund by the amount of the debt, as authorized by 31 
U.S.C. 3720A. Where available, administrative and salary offsets must be 
used before collection is attempted through income tax offset. SBA may 
refer a debt to the IRS for a tax refund offset and take additional 
action against the debtor to collect the debt at the same time or in 
sequence. When SBA makes simultaneous or sequential referrals (within 
six months of the initial notice), only one review pursuant to the rules 
in this part and the statutes authorizing them is required.