[Code of Federal Regulations]

[Title 45, Volume 1]

[Revised as of October 1, 2006]

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

[CITE: 45CFR30.31]



[Page 97-98]

 

                        TITLE 45--PUBLIC WELFARE

 

                    SUBTITLE A--DEPARTMENT OF HEALTH

                           AND HUMAN SERVICES

 

PART 30_CLAIMS COLLECTION--Table of Contents

 

        Subpart D_Termination or Suspension of Collection Action

 

Sec.  30.31  Termination rule.





    (a) The Secretary may terminate collection activity and write off a 

debt, including accrued interest, charges and penalties if the 

outstanding principal does not exceed $20,000 and:

    (1) 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 ability to pay (see 

Sec.  30.25(b)) and the exemptions available to the debtor under State 

and Federal law;

    (2) The debtor cannot be located, there is no security remaining to 

be liquidated, the applicable statute of limitations has run, and the 

prospects of collecting by offset are too remote to justify retention of 

the claim;

    (3) The cost of further collection action is likely to exceed the 

recoverable amount;

    (4) The basis for the claim has proved to be unsupportable; or

    (5) The evidence necessary to prove the claim cannot be produced or 

the necessary witnesses are unavailable.

    (b) As required by section 61(a)(2) of the Internal Revenue Code, 

income arising from the discharge in whole or in part of a debt is to be 

included in the debtor's gross income for the year in which the debt is 

discharged. The Secretary will report to the Internal Revenue Service, 

using Form 1099G, any amount over $600 which becomes uncollectible 

because the applicable statute of limitations expires or because the 

Government agrees with the



[[Page 98]]



debtor to forgive or compromise a debt. An amount which is in dispute, 

which is discharged under Title 11 of the Bankruptcy Act or which arises 

out of an overpayment which was already taxed, will not be reported. See 

IRS Instructions for Form 1096 and Revenue Procedure 83-48 for further 

instructions.