[Code of Federal Regulations]
[Title 41, Volume 3]
[Revised as of July 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 41CFR105-55.030]

[Page 416-417]
 
           TITLE 41--PUBLIC CONTRACTS AND PROPERTY MANAGEMENT
 
              CHAPTER 105--GENERAL SERVICES ADMINISTRATION
 
PART 105-55_COLLECTION OF CLAIMS OWED THE UNITED STATES--Table of Contents
 
Sec. 105-55.030  Discharge of indebtedness; reporting requirements.

    (a) Before discharging a delinquent debt (also referred to as a 
close out of the debt), the General Services Administration (GSA) will 
take all appropriate steps to collect the debt in accordance with 31 
U.S.C. 3711(g), including, as applicable, administrative offset, tax 
refund offset, Federal salary offset, referral to Treasury, Treasury-
designated debt collection centers or private collection contractors, 
credit bureau reporting, wage garnishment, litigation, and foreclosure. 
Discharge of indebtedness is distinct from termination or suspension of 
collection activity and is governed by the Internal Revenue Code. When 
collection action on a debt is suspended or terminated, the debt remains 
delinquent and further collection action may be pursued at a later date 
in accordance with the standards set forth in this part. When GSA 
discharges a debt in full or in part, further collection action is 
prohibited. Therefore, GSA will make the determination that collection 
action is no longer warranted before discharging a debt. Before 
discharging a debt, GSA will terminate debt collection action.

[[Page 417]]

    (b) Section 3711(i), Title 31, United States Code, requires GSA to 
sell a delinquent non-tax debt upon termination of collection action if 
the Secretary determines such a sale is in the best interests of the 
United States. Since the discharge of a debt precludes any further 
collection action (including the sale of a delinquent debt), GSA may not 
discharge a debt until the requirements of 31 U.S.C. 3711(i) have been 
met.
    (c) Upon discharge of a debt of more than $600, GSA must report the 
discharge to the Internal Revenue Service (IRS) in accordance with the 
requirements of 26 U.S.C. 6050P and 26 CFR 1.6050P-1. GSA may request 
Treasury or Treasury-designated debt collection centers to file such a 
discharge report to the IRS on the Agency's behalf.
    (d) When discharging a debt, GSA will request the GSA Office of 
General Counsel to release any liens of record securing the debt.