[Code of Federal Regulations]

[Title 14, Volume 5]

[Revised as of January 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 14CFR1261.416]



[Page 350-352]

 

                     TITLE 14--AERONAUTICS AND SPACE

 

                          SPACE ADMINISTRATION

 

PART 1261_PROCESSING OF MONETARY CLAIMS (GENERAL)--Table of Contents

 

 Subpart 1261.4_Collection of Civil Claims of the United States Arising 

      Out of the Activities of the National Aeronautics and Space 

                          Administration (NASA)

 

Sec. 1261.416  Suspending or terminating collection action.



    (a) The standards set forth in this section apply to the suspension 

or termination of collection action pursuant to 31 U.S.C. 3711(a)(3) on 

claims which do not exceed $20,000, exclusive of interest, penalties, 

and administrative costs, after deducting the amount of partial payments 

or collections, if any. NASA may suspend or terminate collection action 

under this part with respect to claims for money or property arising out 

of activities of the agency, prior to the referral of such claims to the 

General Accounting Office or to the Department of Justice for 

litigation. The Comptroller General (or designee) may exercise such 

authority with respect to claims referred to the General Accounting 

Office prior to their further referral for litigation.

    (b) If, after deducting the amount of partial payments or 

collections, if any, a claim exceeds $20,000, exclusive of interest, 

penalties, and administrative costs, the authority to suspend or 

terminate rests solely with the Department of Justice. If the designated 

official believes suspension or termination may be appropriate, the 

matter should be evaluated using the factors set forth in paragraphs (c) 

and (d) of this section. If the agency concludes that suspension or 

termination is appropriate,



[[Page 351]]



it must refer the matter, with its reasons for the recommendation, to 

the Department of Justice, using the Claims Collection Litigation 

Report. See Sec. 1261.417(e) or 4 CFR 105.2(b). If NASA decides not to 

suspend or terminate collection action on the claim, Department of 

Justice approval is not required; or if it determines that its claim is 

plainly erroneous or clearly without legal merit, it may terminate 

collection action regardless of the amount involved, without the need 

for Department of Justice concurrence.

    (c) Suspension of collection activity--(1) Inability to locate 

debtor. Collection action may be suspended temporarily on a claim when 

the debtor cannot be located after diligent effort and there is reason 

to believe that future collection action may be sufficiently productive 

to justify periodic review and action on the claim, with due 

consideration for the size and amount which may be realized thereon. The 

following sources may be of assistance in locating missing debtors: 

Telephone directories; city directories; postmasters; drivers' license 

records; automobile title and registration records; state and local 

government agencies; the Internal Revenue Service (see 4 CFR 102.18); 

other Federal agencies; employers, relatives, friends; credit agency 

skip locate reports, and credit bureaus. Suspension as to a particular 

debtor should not defer the early liquidation cf security for the debt. 

Every reasonable effort should be made to locate missing debtors 

sufficiently in advance of the bar of the applicable statute of 

limitations, such as 28 U.S.C. 2415, to permit the timely filing of suit 

if such action is warranted. If the missing debtor has signed a confess-

judgment note and is in default, referral of the note for the entry of 

judgment should not be delayed because of the debtor's missing status.

    (2) Financial condition of debtor. Collection action may also be 

suspended temporarily on a claim when the debtor owns no substantial 

equity in realty or personal property and is unable to make payments on 

the Government's claim or effect a compromise at the time, but the 

debtor's future prospects justify retention of the claim for periodic 

review and action, and:

    (i) The applicable statute of limitations has been tolled or started 

running anew; or

    (ii) Future collection can be effected by offset, notwithstanding 

the statute of limitations, with due regard to the 10-year limitation 

prescribed by 31 U.S.C. 3716(c)(1); or

    (iii) The debtor agrees to pay interest on the amount of the debt on 

which collection action will be temporarily suspended, and such 

temporary suspension is likely to enhance the debtor's ability to fully 

pay the principle amount of the debt with interest at a later date.

    (3) Request for waiver or administrative review. If the statute 

under which waiver or administrative review is sought is ``mandatory,'' 

that is, if it prohibits the agency from collecting the debt prior to 

the agency's consideration of the request for waiver or review (see 

Califano v. Yamasaki, 422 U.S. 682 (1979)), then collection action must 

be suspended until either: The agency has considered the request for 

waiver/review; or the applicable time limit for making the waiver/review 

request, as prescribed in a written notice, has expired and the debtor, 

upon notice, has not made such a request. If the applicable waiver/

review statute is ``permissive,'' that is, if it does not require all 

requests for waiver/review to be considered, and if it does not prohibit 

collection action pending consideration of a waiver/request (for 

example, 5 U.S.C. 5584), collection action may be suspended pending 

agency action on a waiver/review request based upon appropriate 

consideration, on a case-by-case basis, as to whether:

    (i) There is a reasonable possibility that waiver will be granted or 

that the debt (in whole or in part) will be found not owing from the 

debtor;

    (ii) The Government's interests would be protected, if suspension 

were granted, by reasonable assurance that the debt could be recovered 

if the debtor does not prevail; and

    (iii) Collection of the debt will cause undue hardship.

    (4) If the applicable statutes and regulations would not authorize 

refund by the agency to the debtor of amounts collected prior to agency 

consideration of the debtor's waiver/review request



[[Page 352]]



(in the event the agency acts favorably on it), collection action should 

ordinarily be suspended, without regard to the factors specified for 

permissive waivers, unless it appears clear, based on the request and 

the surrounding circumstances, that the request is frivolous and was 

made primarily to delay collection. See 4 CFR 104.2.

    (d) Termination of collection activity. Collection activity may be 

terminated and NASA may close its file on the claim based on the 

following:

    (1) Inability to collect any substantial amount. Collection action 

may be terminated on a claim when it becomes clear that the Government 

cannot collect or enforce collection of any significant sum from the 

debtor, having due regard for the judicial remedies available to the 

Government, the debtor's future financial prospects, and the exemptions 

available to the debtor under State and Federal law. In determining the 

debtor's inability to pay, the following factors, among others, may be 

considered: Age and health of the debtor; present and potential income; 

inheritance prospects; the possibility that assets have been concealed 

or improperly transferred by the debtor; the availability of assets or 

income which may be realized by enforced collection proceedings.

    (2) Inability to locate debtor. Collection action may be terminated 

on a claim when the debtor cannot be located, and either:

    (i) There is no security remaining to be liquidated; or

    (ii) The applicable statute of limitations has run and the prospects 

of collecting by offset, notwithstanding the bar of the statute of 

limitations, are too remote to justify retention of the claim.

    (3) Cost will exceed recovery. Collection action may be terminated 

on a claim when it is likely that the cost of further collection action 

will exceed the amount recoverable thereby.

    (4) Claim legally without merit. Collection action should be 

terminated immediately on a claim whenever it is determined that the 

claim is legally without merit.

    (5) Claim cannot be substantiated by evidence. Collection action 

should be terminated when it is determined that the evidence necessary 

to prove the claim cannot be produced or the necessary witnesses are 

unavailable and efforts to reduce voluntary payment are unavailing.

    (e) Transfer of claim. When NASA has doubt as to whether collection 

action should be suspended or terminated on a claim, it may refer the 

claim to the General Accounting Office for advice. When a significant 

enforcement policy is involved in reducing a statutory penalty or 

forfeiture to judgment, or recovery of a judgment is a prerequisite to 

the imposition of administrative sanctions, such as the suspension or 

revocation of a license or the privilege of participating in a 

Government sponsored program, NASA may refer such a claim for litigation 

even though termination of collection activity might otherwise be given 

consideration under paragraphs (d)(1) and (2) of this section. Claims on 

which NASA holds a judgment by assignment or otherwise will be referred 

to the Department of Justice for further action if renewal of the 

judgment lien or enforced collection proceedings are justified under the 

criteria discussed in this section.