[Federal Register Volume 59, Number 3 (Wednesday, January 5, 1994)]
[Rules and Regulations]
[Pages 650-651]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-76]
[[Page Unknown]]
[Federal Register: January 5, 1994]
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Part II
Environmental Protection Agency
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40 CFR Part 13
Referral of Debts to Internal Revenue Service for Tax Refund Offset;
Interim Final Rule
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 13
[FRL-4818-2]
Referral of Debts to the Internal Revenue Service for Tax Refund
Offset
AGENCY: Environmental Protection Agency.
ACTION: Interim rule with request for comments.
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SUMMARY: The Environmental Protection Agency (EPA), as a participant in
the Federal Tax Refund Offset Program, is issuing interim regulations
to govern the referral of delinquent debts to the Internal Revenue
Service (IRS) for offset against the income tax refunds of persons
owing money to EPA. These regulations allow EPA to collect debts by
means of offset from the income tax refunds of persons owing money to
EPA provided certain conditions are met. This rule establishes
procedures to be followed by EPA in requesting the IRS to offset tax
refunds due to taxpayers who have past-due legally enforceable debt
obligations to the EPA.
DATES: Interim rule is effective on January 5, 1994. Written comments
must be received on or before March 7, 1994.
ADDRESSES: Send comments to: Stephen B. Hess, Claims and Property Law
Branch (2376), Office of General Counsel, Environmental Protection
Agency, 401 M Street, SW., Washington, DC 20460.
FOR FURTHER INFORMATION CONTACT: Stephen B. Hess, Office of General
Counsel. Telephone 202-260-7512.
SUPPLEMENTARY INFORMATION: This interim rule provides procedures for
EPA to refer past-due legally enforceable debts to the IRS for offset
against the income tax refunds of persons owing debts to EPA. This rule
is authorized by 31 U.S.C. 3720A, the purpose of which is to improve
the ability of the government to collect money owed it while adding
certain notice requirements and other protections applicable to the
government's relationship to the debtor.
This rule implements 31 U.S.C. 3720A, which directs any Federal
agency that is owed a past-due legally enforceable debt by a named
person to notify the Secretary of the Treasury in accordance with
regulations issued by the Department of the Treasury at 26 CFR
301.6402-6. Before a Federal agency may give such notice, however, it
must first:
(1) Notify the debtor that the agency proposes to refer the debt
for a tax refund deduction;
(2) Give the debtor 60 days from the date of the notification to
present evidence that all or part of the debt is not past-due or
legally enforceable;
(3) Consider any evidence presented by the debtor and determine
whether any amount of such debt is past-due and legally enforceable;
and
(4) Satisfy such other conditions as the Secretary of the Treasury
may prescribe to ensure that the agency's determination is valid and
that the agency has made reasonable efforts to obtain payment of the
debt.
This rule, in accordance with IRS regulations, provides that before
EPA refers a debt to Treasury (through IRS), a notice of intention
(Notice of Intent) will be sent to the debtor. This Notice of Intent
will inform the debtor of the amount of the debt and that unless the
debt is repaid within 60 days from the date of EPA's Notice of Intent,
EPA intends to collect the debt by requesting the IRS to offset any tax
refund payable to the debtor. In addition, the Notice of Intent will
state that the debtor has a right, during such period, to present
evidence that all or part of the debt is not past-due or legally
enforceable. This rule also establishes procedures for the debtor to
present such evidence.
Executive Order 12866
Under Executive Order 12866 (58 FR 51735, October 4, 1993) the
Agency must determine whether the regulatory action is ``significant''
and therefore subject to Office of Management and Budget (OMB) review
and the requirements of the Executive Order. The Order defines
``significant regulatory action'' as one that is likely to result in a
rule that may: (1) Have an annual effect on the economy of $100 million
or more or adversely affect in a material way the economy, a sector of
the economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, or tribal governments or
communities; (2) create a serious inconsistency or otherwise interfere
with an action taken or planned by another agency; (3) materially alter
the budgetary impact of entitlements, grants, user fees, or loan
programs or the rights and obligations of recipients thereof; or (4)
raise novel legal or policy issues arising out of legal mandates, the
President's priorities, or the principles set forth in the Executive
Order.
It has been determined that this rule is not a ``significant
regulatory action'' under the terms of Executive Order 12866 and is
therefore not subject to OMB review.
Regulatory Flexibility Act Certification
This rule does not have a significant impact on a substantial
number of small entities (5 U.S.C. 601 et seq.).
Paperwork Reduction Act
No additional information and record keeping requirements are
imposed by this rule.
National Environmental Policy Act
Promulgation of this rule does not represent a major Federal action
with significant environmental impact. Therefore, preparation of an
environmental assessment or environmental impact statement under the
National Environmental Policy Act of 1969, as amended (42 U.S.C. 4321
et seq.) is not required.
Public Comments
Pursuant to an agreement between the IRS, the Financial Management
Service, and EPA regarding EPA's participation in the Tax Refund Offset
Program for 1994, EPA is required to have promulgated regulations
regarding referral of debts to IRS for tax refund offset prior to EPA's
participation in the program. EPA is issuing interim final regulations
to take effect today in order to fulfill that requirement. Although EPA
will respond to written comments on today's notice, EPA is not holding
a hearing, providing an opportunity for prior comments, or delaying the
effective date because this regulation is mostly procedural and because
there are no significant issues of law or fact or relevant substantial
impacts on the Nation or large numbers of persons of which EPA could
take account consistent with law. Moreover, issuance of immediately
effective interim final regulations does not prejudice the due process
rights of debtors and is essential in order for EPA to participate in
the 1994 program. Written comments are solicited for 60 days after
publication of this document in the Federal Register. A final document
discussing any comments received and revisions required will be
published in the Federal Register as soon as possible after the close
of the comment period.
Other Matters
These procedures are being codified in the Agency's regulations
pursuant to statutory requirements regarding publication of rules of
procedure in the Federal Register, 5 U.S.C. 552(a)(1)(C). However, the
procedures described in the rule will be utilized before it becomes
effective with respect to persons who are provided actual notice of the
procedures through the notices required under the procedures. See 5
U.S.C. 552(a)(1).
List of Subjects in 40 CFR Part 13
Environmental protection, Administrative practice and procedure,
Claims, Government employees, Income taxes, Wages.
Dated: December 28, 1993.
Carol M. Browner,
Administrator.
In consideration of the foregoing, the Environmental Protection
Agency hereby amends part 13 of title 40 of the Code of Federal
Regulations as set forth below.
PART 13--[AMENDED]
1. The authority citation for part 13 is revised to read as
follows:
Authority:5 U.S.C. 552a, 5512, and 5514; 31 U.S.C. 3711 et seq.
and 3720A; 4 CFR parts 101-10.
2. Subpart H is added to part 13 to read as follows:
Subpart H--Referral of Debts to IRS for Tax Refund Offset
Sec.
13.34 Purpose.
13.35 Applicability and scope.
13.36 Administrative charges.
13.37 Notice requirement before offset.
13.38 Review within the Agency.
13.39 Agency determination.
13.40 Stay of offset.
Supbart H--Referral of Debts to IRS for Tax Refund Offset
Sec. 13.34 Purpose.
This subpart establishes procedures for the Environmental
Protection Agency (EPA) to refer past-due debts to the Internal Revenue
Service (IRS) for offset against the income tax refunds of persons
owing debts to EPA. It specifies the Agency procedures and the rights
of the debtor applicable to claims for the payment of debts owed to
EPA.
Sec. 13.35 Applicability and scope.
(a) This subpart implements 31 U.S.C. 3720A, which authorizes the
IRS to reduce a tax refund by the amount of a past-due legally
enforceable debt owed to the United States.
(b) For purposes of this section, a past-due legally enforceable
debt referable to the IRS is a debt which is owed to the United States
and:
(1) Except in the case of a judgment debt, has been delinquent for
at least three months but has not been delinquent for more than ten
years at the time the offset is made;
(2) Cannot be currently collected pursuant to the salary offset
provisions of 5 U.S.C. 5514(a)(1);
(3) 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 Agency against
amounts payable to or on behalf of the debtor by or on behalf of the
Agency;
(4) With respect to which EPA has given the taxpayer at least 60
days from the date of notification to present evidence that all or part
of the debt is not past-due or not legally enforceable, has considered
evidence presented by such taxpayer, if any, and has determined that an
amount of such debt is past-due and legally enforceable;
(5) Has been disclosed by EPA to a consumer reporting agency as
authorized by 31 U.S.C. 3711(f), unless a consumer reporting agency
would be prohibited from using such information by 15 U.S.C. 1681c, or
unless the amount of the debt does not exceed $100.00;
(6) With respect to which EPA has notified or has made a reasonable
attempt to notify the taxpayer that the debt is past-due and, unless
repaid within 60 days thereafter, the debt will be referred to the IRS
for offset against any overpayment of tax;
(7) Is at least $25.00; and
(8) All other requirements of 31 U.S.C. 3720A and the Department of
the Treasury regulations at 26 CFR 301.6402-6 relating to the
eligibility of a debt for tax return offset have been satisfied.
Sec. 13.36 Administrative charges.
In accordance with Sec. 13.11, all administrative charges incurred
in connection with the referral of a debt to the IRS shall be assessed
on the debt and thus increase the amount of the offset.
Sec. 13.37 Notice requirement before offset.
A request for reduction of an IRS tax refund will be made only
after EPA makes a determination that an amount is owed and past-due and
provides the debtor with 60 days written notice. EPA's notice of
intention to collect by IRS tax refund offset (Notice of Intent) will
state:
(a) The amount of the debt;
(b) That unless the debt is repaid within 60 days from the date of
EPA's Notice of Intent, EPA intends to collect the debt by requesting
the IRS to reduce any amounts payable to the debtor as refunds of
Federal taxes paid by an amount equal to the amount of the debt and all
accumulated interest and other charges;
(c) That the debtor has a right to present evidence that all or
part of the debt is not past-due or not legally enforceable; and
(d) A mailing address for forwarding any written correspondence and
a contact name and phone number for any questions.
Sec. 13.38 Review within the Agency.
(a) Notification by debtor. A debtor who receives a Notice of
Intent has the right to present evidence that all or part of the debt
is not past-due or not legally enforceable. To exercise this right, the
debtor must:
(1) Send a written request for a review of the evidence to the
address provided in the notice;
(2) State in the request the amount disputed and the reasons why
the debtor believes that the debt is not past-due or is not legally
enforceable; and
(3) Include in the request any documents which the debtor wishes to
be considered or state that additional information will be submitted
within the remainder of the 60-day period.
(b) Submission of evidence. The debtor may submit evidence showing
that all or part of the debt is not past-due or not legally enforceable
along with the notification required by paragraph (a) of this section.
Failure to submit the notification and evidence within 60 days will
result in an automatic referral of the debt to the IRS without further
action by EPA.
(c) Review of the evidence. EPA will consider all available
evidence related to the debt. Within 30 days, if feasible, EPA will
notify the debtor whether EPA has sustained, amended, or cancelled its
determination that the debt is past-due and legally enforceable.
Sec. 13.39 Agency determination.
(a) Following review of the evidence, EPA will issue a written
decision.
(b) If EPA either sustains or amends its determination, it shall
notify the debtor of its intent to refer the debt to the IRS for offset
against the debtor's Federal income tax refund. If EPA cancels its
original determination, the debt will not be referred to IRS.
Sec. 13.40 Stay of offset.
If the debtor timely notifies the EPA that he or she is exercising
the right described in Sec. 13.38(a) and timely submits evidence in
accordance with Sec. 13.38(b), any notice to the IRS will be stayed
until the issuance of a written decision which sustains or amends its
original determination.
[FR Doc. 94-76 Filed 1-4-94; 8:45 am]
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