CAB Forum Treasury Offset Program August 23 24
CAB Forum Treasury Offset Program August 23– 24, 2006 1
Treasury Offset Program Ø TOP is a system that compares payments with debts. Ø When a match occurs the payment is offset to collect the debt. 2
Administrative Offset – TOP What is offset? Withholding funds payable by the United States to a person to satisfy a debt. 3
Administrative Offset – TOP Ø Requires agencies to notify Treasury of all debts over 180 days delinquent for purposes of offset Ø Requires disbursing officials to offset payments 4
TOP Process Does payee name & TIN match debtor name & TIN? PAYMENTS No Check or EFT to payee TOP Database DEBTS Yes $$ to creditor agency Notice to debtor 5
Offset Notice Ø Sent by FMS Contains: Ø Date and amount of offset Ø Agency to which money was sent Ø Point of contact at the agency 6
TOP – Payments All Federal Payments: Ø Ø Ø Federal tax refunds Federal retirement Federal benefits Federal salary Vendor payments to government contractors Federal employee travel advances & travel reimbursements 7
TOP – Exemptions/Payments Ø Payments exempted by law, e. g. student loan payments, veterans’ benefits Ø Payments exempted by Treasury Ø Means-tested payments Ø Non means-tested payments – if offset would tend to interfere with or defeat the purpose of the program 8
Priority of Debts in TOP Ø IRS Income Tax Debts Ø Child Support Debts (TANF) Ø Federal Non-Tax Debts Ø Child Support Debts (Non-TANF) Ø State Income Tax Debts 9
Priority of Debts in TOP Ø When more than one debt is submitted for the same debtor, TOP applies funds collected in accordance with priorities set by statue and policy. Ø If a debtor has two or more debts for the same priority, TOP applies funds to the oldest debt first. 10
TOP – Exemptions/Debts Ø Ø Ø Ø No express exemptions in the DCIA Owed by Federal agencies In bankruptcy In foreclosure In forbearance or under appeal At DOJ Owed by foreign sovereign Over applicable statute of limitations 11
Joint and Several Liability Ø Allows TOP to link multiple debtors to a single debt Ø Allows agencies to submit their Joint and Several debts as a single debt 12
Centralized Salary Offset (CSO) Ø Federal agencies collect debts owed by a Federal Employee through installment deductions from the employee’s pay. Salary Offset Limits Ø 15% of “disposable pay” for Federal nontax debts 13
What is Disposable Pay? The dollar amount left after the following deductions: Ø Tax levies Ø Properly withheld taxes, FICA, Medicare Ø Health and life insurance premiums Ø Retirement contributions Does NOT include amounts deducted under a garnishment 14
What’s Different for CSO? Ø Minimum amount of a debt referred for Salary Offset is $100 Ø Salary Offset will always take the debt balance to zero Ø TOP does not take the offsets Ø SPA offsets salary payment 15
Centralized Salary Offset (CSO) Participating Salary Paying Agencies: Ø Department of the Interior Ø National Finance Center Ø Department of Defense - DFAS Ø U. S. Postal Service Ø General Services Administration 16
State Reciprocal Program Ø States will refer debts to TOP for offset against Federal vendor payments and State payments will be matched against Federal debts. Ø Working on the draft rule on Administrative Offset Under Reciprocal Agreements with States. Ø Pilot to begin in the third quarter of Calendar Year 2007 with Maryland, New Jersey and Kentucky. 17
TOP - Agency Requirements Ø Regulations Ø Privacy Act Notices Ø Due Process - 60 day notice Ø Certification Ø Compliance with agency specific statutes (if any) and regulations 18
TOP – How to Participate Ø Agency Profile Input Form Ø Security Access Request Form Ø Transmission Method 19
TOP - Agency Profile Input Form Ø The Agency Profile Input Form provides information about participating Creditor Agencies Ø Agency Name, Address, Debtor Contact Information are provided to the debtor on offset notices Ø Agency Location Codes are used to IPAC monies collected 20
TOP - Agency Profile Input Form Ø Can agency reduce debt balance to $0. 00 Ø Are fees to be paid by the debtor or the agency? Ø Type of payments to be bypassed Ø Transmission Method Ø Debt Types to be offset 21
TOP - Agency Profile Input Form Ø At a minimum, should be reviewed annually Ø Should be updated when any change occurs within the agency Mail to: Department of the Treasury FMS, Treasury Offset Program 401 14 th Street S. W. Room 228 B Washington, DC 20227 Or Fax to: Attn: Manager, TOP Operations Branch (c/o Horace Tate) 202 -874 -6474 22
TOP - Security Access Request Form The Security Access Request Form is used to request access to the: Ø TOP Client Ø FMS Mainframe to transmit files. 23
TOP - Security Access Request Form Information needed on form: Ø Employee Name, Agency Name & Address Ø Type of access needed Ø Transmission Method (Secur. ID or Network to Network) Ø Supervisors Name Ø FPA Security Point of Contact Ø Operating System 24
TOP - Security Access Request Form If you forget your password call 202 -874 -HELP Questions filling out the form call Katrina Gonzalez on 202 -874 -7626 Mail original form only to: Department of the Treasury FMS, Treasury Offset Program 401 14 th Street S. W. , Room 213 B Washington, DC 20227 Attn: Katrina Gonzalez 25
TOP - Transmission Method Batch Processing CONNECT: Direct Ø Dataline from creditor agency to FMS Ø Frame: Relay – Dataline to nearest Sprint Location CONNECT: Mailbox Ø Manual process using Modem to transmit files to FMS 26
TOP - Transmission Method Individual Debt/Manual Processing The Client: Ø Online input of debt information Ø Usually for smaller agencies with a low volume of debt 27
As of June 30, 2006 TOP database contains– Ø $36. 2 billion in Federal Non-Tax Debts. Ø $86. 1 billion in Child Support Debts. Ø $129. 4 billion in Federal Tax Debts. Ø $5. 7 billion in State Income Tax Debts. Total - $257. 5 billion! 28
CY Collections Through TOP As of July 12, 2006 Ø Administrative Offsets $82. 3 million Ø Tax Refund Offset Child Support $1. 4 billion Ø Tax Refund Offset Federal Non-Tax Debt $950. 5 million Ø Tax Refund Offset State Income Tax Debt $189. 4 million Ø Tax Levy $164. 9 million 29
DMS FEES Ø DMS is reimbursable is Ø Offset Fee for Fiscal Year 2006: $15. 00 *For Salary Offset, Salary Paying Agency may charge an additional fee 30
Debt Management Operations Center Operates the National TOP Call Center 1 -800 -304 -3107 CY 2005 – 3 million calls Callers are referred to creditor agency for– Ø Account balances Ø Particular debt information Ø Removal from TOP Ø Adjustments or refunds 31
Purpose: Ø To Assist Agencies in Collecting Delinquent, Non. Tax Debt by Providing Information to Agencies and Lenders on Whether Individuals and Businesses Applying for Federal Loans, Loan Insurance, and Loan Guarantees have a Debt with the Federal Government (U. S. C. § 3720 B and 31 C. F. R. § 285. 13). Ø To Provide an Online Resource on Delinquent Debtors for Federal Agencies for Purposes of Carrying Out the Law. 32
Ø Debt Check is a 2 factor, level 3 security application Ø Issuing Public Key Infrastructure (PKI) certificates Ø Pilot phase with USDA Ø Small Business Administration is currently in production Ø Exploring the option of a Portal Between CAIVRS and Debt Check. 33
As of July 20, 2006, 23, 284 Inquiries were Run on the Debt Check Database. Of Those Inquiries, There were 116 Full Matches and 90 Partial Matches. 34
Authority Ø Federal Agencies are required to deny loans or loan guarantees to individuals who owe delinquent non-tax debt to the Federal government (U. S. C. § 3720 B and 31 C. F. R. § 285. 13). 35
Authority Ø Executive Order 13019 extends this bar to delinquent child support debtors whose debts have been referred to the Treasury Offset Program for administrative offset. Ø Currently, the bar has not been extended to Federal or State tax debt. 36
Debt Program Division Ø Dean Balamaci, Director (202) 874 -0540 Ø Rosemary Mc. Cambridge, Manager Debt Program Relations Branch (202) 874 -6727 Ø Alyssa Riedl, Manager Debt Program Support Branch (202) 874 -6859 37
Questions 38
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