Federal claims collection: State income tax obligations; tax refund payments offset, 3616-3617 [05-1421]
[Federal Register: January 26, 2005 (Volume 70, Number 16)]
[Rules and Regulations]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
DEPARTMENT OF THE TREASURY
31 CFR Part 285
Offset of Tax Refund Payments To Collect State Income Tax
AGENCY: Financial Management Service, Fiscal Service, Treasury.
ACTION: Final rule.
SUMMARY: Under provisions of the Internal Revenue Service Restructuring
and Reform Act of 1998, the Federal tax refund of a taxpayer who owes a
past-due, legally enforceable State income tax obligation may be
reduced, or offset, by the amount owed by the taxpayer. The funds
offset from the taxpayer's Federal tax refund are forwarded to the
State that reported the past-due State income tax obligation. On
December 20, 1999, the U.S. Department of the Treasury's Financial
Management Service (FMS) published a notice of proposed rulemaking in
the Federal Register by cross-reference to an interim rule published in
the Federal Register on the same day. This final rule adopts the
interim rule without change.
DATES: This rule is effective January 26, 2005.
FOR FURTHER INFORMATION CONTACT: Gerry Isenberg, Financial Program
Specialist, at (202) 874-6660; 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/debt.
The Internal Revenue Code authorizes the Secretary of the Treasury
to offset Federal tax refund payments to satisfy debts owed to the
United States and to collect past-due support for States. Under the
Internal Revenue Service Restructuring and Reform Act of 1998, Pub. L.
105-206, 112 Stat. 685, 779 (1998), the authority to offset tax refund
payments was amended to allow for the offset of Federal tax refund
payments to collect past-due, legally enforceable State income tax
obligations reported to the Secretary of the Treasury by States. The
amendments authorizing such offsets were effective January 1, 2000.
Offsets to collect delinquent State income tax debts from Federal
tax refunds are processed through the Treasury Offset Program (TOP),
which is operated by FMS, the disbursing office for the Treasury
Department. TOP is a centralized offset program through which FMS
offsets tax refund payments, as well as other nontax Federal payments,
to collect delinquent debts owed to Federal agencies and States. This
rule governs only the offset of one type of payment (i.e., tax refunds)
to pay one type of delinquent debt (i.e., past-due, legally enforceable
State income tax obligations).
On December 20, 1999, FMS published a notice of proposed
rulemaking, 64 FR 71233 (NPRM), concerning the offset of tax refunds to
collect delinquent income tax obligations owed to States. On the same
day, FMS published an interim rule with request for comments, 64 FR
71228, which contained the text for the NPRM. The closing date for
comments regarding the proposed and interim rules was January 19, 2000.
Comments on the Proposed and Interim Rules
FMS did not receive any comments on the NPRM by the close of the
comment period. Likewise, FMS did not receive any comments on the
interim rule, which served as the text for the NPRM. Therefore, the
interim rule is adopted, without change, as a final rule.
This final rule is not a significant regulatory action as defined
in Executive Order 12866. Pursuant to the Regulatory Flexibility Act (5
U.S.C. chapter 6), it is hereby certified that this rule will not have
a significant economic impact on a substantial number of small
entities. The basis for this certification is that this rule only
assists States in the collection of past-due legally enforceable State
income tax debt. Therefore, a regulatory flexibility analysis is not
FMS has determined that good cause exists to make this final rule
effective upon publication without providing the 30-day period between
publication and the effective date contemplated by 5 U.S.C. 553(d). The
purpose of a delayed effective date is to afford persons affected by a
rule a reasonable time to prepare for compliance. However, in this
case, FMS has been collecting past-due income tax obligations owed to
States by tax refund offset since January 2000. Procedures affecting
States submitting delinquent income tax obligations for collection and
persons owing delinquent income tax obligations to States remain
substantially unchanged. This final rule provides important guidance
that is expected to facilitate States' participation in the tax refund
offset program. Therefore, FMS believes that good cause exists to make
the rule effective upon publication.
List of Subjects in 31 CFR Part 285
Administrative practice and procedure, Black lung benefits, Child
support, Claims, Credit, Debts, Disability benefits, Federal employees,
Garnishment of wages, Hearing and appeal procedures, Loan programs,
Privacy, Railroad retirement, Railroad unemployment insurance,
Salaries, Social Security benefits, Supplemental Security Income (SSI),
Taxes, Veteran's benefits, Wages.
Adoption as Final Rule
Accordingly, the interim rule adding Sec. 285.8 to 31 CFR part 285,
subpart A, which was published at 64 FR 71228 on December 20, 1999, is
adopted as a final rule without change.
Dated: January 21, 2005.
Richard L. Gregg,
[FR Doc. 05-1421 Filed 1-25-05; 8:45 am]
BILLING CODE 4810-35-P