[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 3989 Introduced in Senate (IS)]

111th CONGRESS
  2d Session
                                S. 3989

 To amend the Internal Revenue Code of 1986 to allow an offset against 
  income tax refunds to pay for restitution and other State judicial 
                        debts that are past-due.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           November 30, 2010

 Mr. Wyden (for himself, Mr. Sessions, Mrs. McCaskill, and Mr. Thune) 
introduced the following bill; which was read twice and referred to the 
                          Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to allow an offset against 
  income tax refunds to pay for restitution and other State judicial 
                        debts that are past-due.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. OFFSET OF RESTITUTION AND OTHER STATE JUDICIAL DEBTS AGAINST 
              INCOME TAX REFUND.

    (a) In General.--Section 6402 of the Internal Revenue Code of 1986 
(relating to authority to make credits or refunds) is amended by 
redesignating subsections (f) through (l) as subsections (g) through 
(m), respectively, and by inserting after subsection (f) the following:
    ``(g) Collection of Past-Due, Legally Enforceable Restitution and 
Other State Judicial Debts.--
            ``(1) In general.--In any State which wishes to collect 
        past-due, legally enforceable State judicial debts, the chief 
        justice of the State's highest court shall designate a single 
        State entity to communicate judicial debt information to the 
        Secretary. In making such designation, the chief justice of the 
        State's highest court shall select, whenever practicable, a 
        relevant State official or agency responsible under State law 
        for collecting the State's income tax or other statewide excise 
        at the time of the designation. Upon receiving notice from a 
        State designated entity that a named person owes a past-due, 
        legally enforceable State judicial debt to or in such State, 
        the Secretary shall, under such conditions as may be prescribed 
        by the Secretary--
                    ``(A) reduce the amount of any overpayment payable 
                to such person by the amount of such State judicial 
                debt;
                    ``(B) pay the amount by which such overpayment is 
                reduced under subparagraph (A) to such State designated 
                entity and notify such State designated entity of such 
                person's name, taxpayer identification number, address, 
                and the amount collected; and
                    ``(C) notify the person making such overpayment 
                that the overpayment has been reduced by an amount 
                necessary to satisfy a past-due, legally enforceable 
                State judicial debt.
        If an offset is made pursuant to a joint return, the notice 
        under subparagraph (B) shall include the names, taxpayer 
        identification numbers, and addresses of each person filing 
        such return.
            ``(2) Priorities for offset.--Any overpayment by a person 
        shall be reduced pursuant to this subsection--
                    ``(A) after such overpayment is reduced pursuant 
                to--
                            ``(i) subsection (a) with respect to any 
                        liability for any internal revenue tax on the 
                        part of the person who made the overpayment;
                            ``(ii) subsection (c) with respect to past-
                        due support;
                            ``(iii) subsection (d) with respect to any 
                        past-due, legally enforceable debt owed to a 
                        Federal agency; and
                            ``(iv) subsection (e) with respect to any 
                        past-due, legally enforceable State income tax 
                        obligations; and
                    ``(B) before such overpayment is credited to the 
                future liability for any Federal internal revenue tax 
                of such person pursuant to subsection (b).
        If the Secretary receives notice from 1 or more State 
        designated entities of more than 1 debt subject to paragraph 
        (1) that is owed by such person to such State agency or State 
        judicial branch, any overpayment by such person shall be 
        applied against such debts in the order in which such debts 
        accrued.
            ``(3) Notice; consideration of evidence.--Rules similar to 
        the rules of subsection (e)(4) shall apply with respect to 
        debts under this subsection.
            ``(4) Past-due, legally enforceable state judicial debt.--
                    ``(A) In general.--For purposes of this subsection, 
                the term `past-due, legally enforceable State judicial 
                debt' means a debt--
                            ``(i) which resulted from a judgment or 
                        sentence rendered by any court or tribunal of 
                        competent jurisdiction which--
                                    ``(I) handles criminal or traffic 
                                cases in the State; and
                                    ``(II) has determined an amount of 
                                State judicial debt to be due; and
                            ``(ii) which resulted from a State judicial 
                        debt which has been assessed and is past-due 
                        but not collected.
                    ``(B) State judicial debt.--For purposes of this 
                paragraph, the term `State judicial debt' includes 
                court costs, fees, fines, assessments, restitution to 
                victims of crime, and other monies resulting from a 
                judgment or sentence rendered by any court or tribunal 
                of competent jurisdiction handling criminal or traffic 
                cases in the State.
            ``(5) Regulations.--The Secretary shall issue regulations 
        prescribing the time and manner in which State designated 
        entities must submit notices of past-due, legally enforceable 
        State judicial debts and the necessary information that must be 
        contained in or accompany such notices. The regulations shall 
        specify the types of State judicial monies and the minimum 
        amount of debt to which the reduction procedure established by 
        paragraph (1) may be applied. The regulations shall require 
        State designated entities to pay a fee to reimburse the 
        Secretary for the cost of applying such procedure. Any fee paid 
        to the Secretary pursuant to the preceding sentence shall be 
        used to reimburse appropriations which bore all or part of the 
        cost of applying such procedure.
            ``(6) Erroneous payment to state.--Any State designated 
        entity receiving notice from the Secretary that an erroneous 
        payment has been made to such State designated entity under 
        paragraph (1) shall pay promptly to the Secretary, in 
        accordance with such regulations as the Secretary may 
        prescribe, an amount equal to the amount of such erroneous 
        payment (without regard to whether any other amounts payable to 
        such State designated entity under such paragraph have been 
        paid to such State designated entity).''.
    (b) Disclosure of Return Information.--Section 6103(l)(10) of the 
Internal Revenue Code of 1986 (relating to disclosure of certain 
information to agencies requesting a reduction under subsection (c), 
(d), (e), or (f) of section 6402) is amended by striking ``or (f)'' 
each place it appears in the text and heading and inserting ``(f), or 
(g)''.
    (c) Conforming Amendments.--
            (1) Section 6402(a) of the Internal Revenue Code of 1986 is 
        amended by striking ``and (f)'' and inserting ``(f), and (g)''.
            (2) Paragraph (2) of section 6402(d) of such Code is 
        amended by striking ``subsections (e) and (f)'' and inserting 
        ``subsections (e), (f), and (g)''.
            (3) Paragraph (3)(B) of section 6402(e) of such Code is 
        amended to read as follows:
                    ``(B) before such overpayment is--
                            ``(i) reduced pursuant to subsection (g) 
                        with respect to past-due, legally enforceable 
                        State judicial debts, and
                            ``(ii) credited to the future liability for 
                        any Federal internal revenue tax of such person 
                        pursuant to subsection (b).''.
            (4) Section 6402(h) of such Code, as so redesignated, is 
        amended by striking ``or (f)'' and inserting ``(f), or (g)''.
            (5) Section 6402(j) of such Code, as so redesignated, is 
        amended by striking ``or (f)'' and inserting ``, (f), or (g)''.
    (d) Effective Date.--The amendments made by this Act shall apply to 
refunds payable for taxable years beginning after December 31, 2009.
                                 <all>