United States Government Publishing Office publisher pbl distributor dst United States Government Accountability Office author aut Government Organization text government publication eng GAOREPORTS Legislative Agency Publications gao legislative 2010-08-12 U.S. Government Printing Office 2005-07-26 monographic deposited born digital 19 p. GA 1.13:GAO-05-697R https://www.govinfo.gov/app/details/GAOREPORTS-GAO-05-697R P0b002ee1803a3e46 f:d05697r DGPO 2010-08-12 2011-03-28 GAOREPORTS-GAO-05-697R machine generated eng fdlp REPORT GAOREPORTS-GAO-05-697R GAO-05-697R Contractor payments Debt collection Federal/state relations Offsetting collections Federal taxes State taxes Tax nonpayment Treasury Offset Program Correspondence A31360 The Debt Collection Improvement Act of 1996 (DCIA) allows the federal government to collect state debts from federal payments to contractors. However, before a state can participate in this program, DCIA requires that the state enter into a reciprocal agreement with the Department of the Treasury that would require the state to collect unpaid federal debt from state payments if Treasury collects unpaid state debt from federal payments. In February 2004, we reported that Department of Defense (DOD) and Internal Revenue Service (IRS) records showed that over 27,000 DOD contractors had nearly $3 billion in unpaid federal taxes as of September 30, 2002. In a hearing before the Senate Permanent Subcommittee on Investigations on February 12, 2004, we noted that many of those contractors also had unpaid state taxes. Based on the issues raised in that hearing, Congress requested that we determine (1) the extent to which Financial Management Service (FMS) and the states have entered into reciprocal agreements to collect unpaid state and federal debt from their payments to contractors and (2) whether additional opportunities may exist for the Department of the Treasury's FMS to collect unpaid state taxes from federal contractors. This report responds to that request by providing information on (1) the extent of states' participation in FMS's debt collection levy and offset programs, (2) the potential benefits to states of participation in those programs, and (3) the level of state participation in, and the benefits states derive from, the collection of state tax debt from federal income tax refunds. https://www.govinfo.gov/content/pkg/GAOREPORTS-GAO-05-697R/html/GAOREPORTS-GAO-05-697R.htm https://www.govinfo.gov/content/pkg/GAOREPORTS-GAO-05-697R/pdf/GAOREPORTS-GAO-05-697R.pdf GAO-05-697R https://www.govinfo.gov/app/details/GAOREPORTS-GAO-05-697R Correspondence GAO-05-697R; Financial Management: State and Federal Governments Are Not Taking Action to Collect Unpaid Debt through Reciprocal Agreements; Contractor payments Debt collection Federal/state relations Offsetting collections Federal taxes State taxes Tax nonpayment Treasury Offset Program