[Federal Register Volume 59, Number 1 (Monday, January 3, 1994)]
[Rules and Regulations]
[Pages 23-25]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 93-31710]


[[Page Unknown]]

[Federal Register: January 3, 1994]


=======================================================================
-----------------------------------------------------------------------

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION

29 CFR Part 1650

 

Collection of Debts by Federal Tax Refund Offset

AGENCY: Equal Employment Opportunity Commission.

ACTION: Interim final rule.

-----------------------------------------------------------------------

SUMMARY: The Equal Employment Opportunity Commission (EEOC) is amending 
its regulations, pursuant to the Deficit Reduction Act of 1984, to add 
regulations on procedures for the collection of debts by Federal tax 
refund offset. This rule outlines the procedures that EEOC will follow 
for collection of a past-due, legally enforceable debt owed to EEOC by 
referring such debt to the internal Revenue Service (IRS) for offset 
against any overpayment of tax.

DATES: The interim final rule is effective on January 3, 1994. Comments 
must be received by March 4, 1994.

ADDRESSES: Written comments should be addressed to Frances Hart, 
Executive Officer, Office of Executive Secretariat, Equal Employment 
Opportunity Commission, room 10402, 1801 L Street, NW., Washington, DC 
20507.

FOR FURTHER INFORMATION CONTACT:
Nicholas M. Inzeo, Associate Legal Counsel, Thomas J. Schlageter, 
Assistant Legal Counsel, or Daniel T. Riordan, Staff Attorney, at (202) 
663-4669.
    Copies of this interim final rule are available, upon request, in 
the following alternate formats: Large print, braille, electronic file 
on computer disk, and audio-tape. Copies may be obtained from the EEOC 
Publications Center by calling (800) 669-3362 (voice) or (800) 800-3302 
(TDD).

SUPPLEMENTARY INFORMATION: Section 2653 of the Deficit Reduction Act of 
1984, 31 U.S.C. 3720A, was designed to make significant improvements in 
a Federal agency's ability to collect a past-due, legally enforceable 
debt owed by a taxpayer through offset by the IRS against an 
overpayment of Federal tax. The Deficit Reduction Act also amended the 
Internal Revenue Code of 1954 by adding subsection 6402(d) providing 
that the Secretary of the Treasury shall: (1) Reduce the amount of any 
overpayment due any person by the amount of a past-due, legally 
enforceable debt owed to any Federal agency upon receiving notice from 
the agency that such person owes the debt, (2) pay the reduction to the 
agency, and (3) notify the person making the overpayment that the 
overpayment has been reduced to satisfy such debt.
    These regulations contain the procedures for collecting debts due 
to the Commission. The individual owing the past-due, legally 
enforceable debt will be notified of the debt and given the opportunity 
to submit evidence concerning the existence or amount of the debt. Any 
evidence received will be considered by Commission officials prior to 
submitting any claim to the IRS for collection.
    The Commission has determined that this rule does not constitute a 
major rule for the purposes of Executive Order 12291. The Commission 
also certifies under 5 U.S.C. 605(b), enacted by the Regulatory 
Flexibility Act (Pub. L. 96-354), that the rule will not result in a 
significant impact on a substantial number of small employers. For this 
reason, a regulatory flexibility analysis is not required.

    For the Commission.
Tony E. Gallegos,
Chairman.
    For the reasons set forth in the preamble, title 29, chapter XIV of 
the Code of Federal Regulations is amended by adding part 1650 to read 
as follows:

PART 1650--DEBT COLLECTION

Subpart A--[Reserved]

Subpart B--Procedures for the Collection of Debts by Federal Tax Refund 
Offset

Sec.
1650.201  Purpose.
1650.202  Past-due legally enforceable debt.
1650.203  Notification of intent to collect.
1650.204  Reasonable attempt to notify.
1650.205  Consideration of evidence submitted as a result of 
notification of intent
1650.206  Notification to Internal Revenue Service.
1650.207  Administrative charges.

    Authority: 31 U.S.C. 3720A

Subpart A--[Reserved]

Subpart B--Procedures for the Collection of Debts by Federal Tax Refund 
Offset

    Authority: 31 U.S.C. 3720A.


Sec. 1650.201  Purpose.

    This subpart establishes procedures for EEOC to refer past-due 
legally enforceable debts to the Internal Revenue Service (IRS) for 
offset against the income tax refunds of persons owing debts to EEOC. 
It specifies the agency procedures and the rights of the debtor 
applicable to claims referred under the Federal Tax Refund Offset 
Program for the collection of debts owned to EEOC.


Sec. 1650.202  Past-due legally enforceable debt.

    A past-due legally enforceable debt for referral to the IRS is a 
debt that resulted from any statute administered by EEOC and:
    (a) Is an obligation of a debtor who is a natural person;
    (b) Except in the case of a judgment debt, has been delinquent at 
least 3 months but not more than 10 years at the time the offset is 
made;
    (c) Is at least $25.00;
    (d) Cannot be currently collected pursuant to the salary offset 
provisions of 5 U.S.C. 5514(a)(1);
    (e) Is ineligible for administrative offset under 31 U.S.C. 3716(a) 
by reason of 31 U.S.C. 3716(c)(2) or cannot be collected by 
administrative offset under 31 U.S.C. 3716(a) by the EEOC against 
amounts payable to or on behalf of the debtor by or on behalf of the 
EEOC;
    (f) With respect to which EEOC has given the debtor at least 60 
days from the date of notification to present evidence that all or part 
of the debt is not past-due or legally enforceable, has considered 
evidence presented by such debtor, and has determined that an amount of 
such debt is past-due and legally enforceable;
    (g) Has been disclosed by EEOC to a consumer reporting agency is 
authorized by 31 U.S.C. 3711(f), unless the consumer reporting agency 
would be prohibited from reporting such information by 15 U.S.C. 1681c, 
or unless the amount of the debt does not exceed $100.00;
    (h) EEOC's records do not contain evidence that the person owing 
that debt (or his or her spouse) has filed for bankruptcy under title 
11 of the United States Code; and
    (i) EEOC can clearly establish at the time of the referral that the 
automatic stay under 11 U.S.C. 362 has been lifted or is no longer in 
effect with respect to the person owing the debt or his or her spouse, 
and the debt was not discharged in the bankruptcy proceeding.


Sec. 1650.203  Notification of intent to collect.

    (a) Notification before submission to the IRS. A request for 
reduction of an IRS income tax refund will be made only after EEOC 
makes a determination that an amount is owed and past-due and gives or 
makes a reasonable attempt to give the debtor 60 days written 
notification of intent to collect by Federal tax refund offset.
    (b) Contents of Notification. EEOC's notification of intent to 
collect by Federal tax refund offset shall provide:
    (1) The amount of the debt;
    (2) That unless the debt is repaid within 60 days from the date of 
EEOC's notification of intent, EEOC intends to collect the debt by 
requesting the IRS to offset an amount equal to the amount of the debt 
and all accumulating interest and other charges against any overpayment 
of tax after liabilities subject to 26 U.S.C. 6402(a) and (c) have been 
satisfied;
    (3) A mailing address for forwarding any written correspondence and 
a contact and a toll-free or collect telephone number for any 
questions; and
    (4) That the debtor may present evidence to EEOC that all or part 
of the debt is not past due or legally enforceable by--
    (i) Sending a written request for a review of the evidence to the 
address provided in the notification;
    (ii) Stating in the request for review the amount disputed and the 
reasons why the debtor believes that the debt is not past-due or is not 
legally enforceable; or
    (iii) Including in the request for review any documents that the 
debtor wishes to be considered to stating that the additional 
information will be submitted within the remainder of the 60-day 
period.


Sec. 1650.204  Reasonable attempt to notify.

    In order to constitute a reasonable attempt to notify the debtor, 
EEOC must have used a mailing address for the debtor obtained from the 
IRS pursuant to 26 U.S.C. 6103(m)(2) within a period of 1 year 
preceding the attempt to notify the debtor, unless EEOC receives clear 
and concise notification from the debtor that notices from the agency 
are to be sent to an address different from the address obtained from 
IRS. Clear and concise notification means that the debtor has provided 
the agency with written notification, including the debtor's name and 
identifying number (as defined in 26 CFR 301.6109-1), the debtor's new 
address, and the debtor's intent to have the agency notices sent to the 
new address.


Sec. 1650.205  Consideration of evidence submitted as a result of 
notification of intent. '

    (a) Consideration of evidence. If, as a result of the notification 
of intent, EEOC receives notice that the debtor will submit additional 
evidence or receives additional evidence from the debtor within the 
prescribed time period, any referral to the IRS will be stayed until 
EEOC--
    (1) Considers the evidence presented by the debtor;
    (2) Determines whether or not all or a portion of the debt is still 
past-due and legally enforceable; and
    (3) Notifies the debtor of its determination.
    Failure to submit the evidence within 60 days from the date of 
notification will result in an automatic referral of the debt to IRS 
without further action by EEOC.
    (b) Notification to the debtor. Following its review of the 
evidence, EEOC will issue a written decision notifying the debtor 
whether EEOC has sustained, amended, or canceled its determination that 
the debt is past-due and legally enforceable. The notice will advise 
the debtor of any further action to be taken and explain the supporting 
rationale for the decision.
    (1) EEOC will notify the debtor of its intent to refer the debt to 
the IRS for offset against the debtor's Federal income tax refund if it 
sustains its decision that the debt is past-due and legally 
enforceable. EEOC will also notify the debtor whether the amount of the 
debt remains the same or is modified.
    (2) EEOC will not refer the debt to the IRS for offset against the 
debtor's Federal income tax refund if it reverses its decision that the 
debt is past-due and legally enforceable.


Sec. 1650.206  Notification to Internal Revenue Service.

    (a) Except as noted in paragraph (b) of this section, after EEOC's 
initial notification and referral of a debt to IRS for offset against a 
debtor's Federal income tax refund, EEOC will promptly notify IRS of 
any changes in the notification, if EEOC--
    (1) Determines that an error has been made with respect to the 
information contained in the notification;
    (2) Receives a payment or credits a payment to the account of the 
debtor named in the notification that reduces the amount of the debt 
referred to IRS for offset;
    (3) Receives notification that the individual owing the debt has 
filed for bankruptcy under title 11 of the United States Code or has 
been adjudicated bankrupt and the debt has been discharged;
    (4) Receives notification that an offset was made at a time when 
the automatic stay provisions of 11 U.S.C. 362 were in effect; or
    (5) Refunds all or part of the offset amount to the debtor.
    (b) EEOC shall not request the IRS to increase the amount of a debt 
owed by a debtor named in EEOC's original notification to IRS.
    (c) If the amount of a debt is reduced after referral by EEOC and 
offset by the IRS, EEOC will refund to the debtor any excess amount and 
will promptly notify the IRS of any refund made by EEOC.


Sec. 1650.207  Administrative charges.

    All administrative charges incurred in connection with the referral 
of the debts to the IRS will be assessed on the debt and thus increase 
the amount of the offset.

[FR Doc. 93-31710 Filed 12-30-93; 8:45 am]
BILLING CODE 6570-01-M