Offset of Tax Refund Payments to Collect Past-Due, Legally Enforceable Nontax Debt

SUMMARY: This final rule adopts the interim rule, published in the

Federal Register on June 25, 1997, concerning the tax refund offset

procedures applicable to the collection of delinquent nontax debt owed

to Federal agencies.

DATES: This rule is effective September 28, 1998. This rule applies to

tax refund payments payable after January 1, 1998.

FOR FURTHER INFORMATION CONTACT: Gerry Isenberg, Financial Program

Specialist, at (202) 874-6660; Martin Mills, Treasury Offset Program,

at (202) 874-8700; Ellen Neubauer or Ronda Kent, Senior Attorneys, at

(202) 874-6680. A copy of this final rule is being made available for

downloading from the Financial Management Service web site at the

following address: http://www.fms.treas.gov.

SUPPLEMENTARY INFORMATION:

Background

On June 25, 1997, the Financial Management Service (FMS) published

in the Federal Register an interim rule with request for comments

concerning the tax refund offset procedures applicable to the

collection of delinquent nontax debt owed to Federal agencies (62 FR

34175, June 25, 1997). The closing date for the submission of comments

was July 25, 1997.

Since publication of the interim rule, FMS and the Internal Revenue

Service have delayed the merger of the tax refund offset program with

the Treasury Offset Program to January 1, 1999. However, the procedural

changes affecting the prerequisites to participation in the tax refund

offset program remain effective for all tax refund payments payable

after January 1, 1998. Therefore, the interim rule may be adopted

without changing the effective date.

Comments on the Interim Rule

By the close of the comment period, FMS received one comment on the

interim rule from one organization commenting on behalf of a provider

of tax-related financial services and a financial institution. The

commenter noted that the rule does not require agencies to report debts

to credit bureaus before submitting them for collection by tax refund

offset. The commenter suggested that the rule should establish a time

frame within which an agency is required to report a delinquent debt to

a credit bureau.

This rule does not include credit bureau reporting as a

prerequisite for participation, or as a requirement for continued

participation, in the tax refund offset program. Section 31001(k) of

the Debt Collection Improvement Act of 1996, Pub. L. 104-134, 110 Stat.

1321-358 (Apr. 26, 1996), codified at 31 U.S.C. 3711(e), mandates that

agencies report consumer debt to credit bureaus. Therefore, it is not

necessary to address credit bureau reporting in the tax refund offset

program and no change has been made to the final rule.

Adoption as Final Rule

Accordingly, the interim rule adding 31 CFR part 285 which was

published at 62 FR 34175 on June 25, 1997, is adopted as a final rule

without change.

Dated: August 21, 1998.

Richard L. Gregg,

Commissioner.

[FR Doc. 98-22939 Filed 8-27-98; 8:45 am]

BILLING CODE 4810-35-P