
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 31USC3720A]

 
                       TITLE 31--MONEY AND FINANCE
 
                   SUBTITLE III--FINANCIAL MANAGEMENT
 
                           CHAPTER 37--CLAIMS
 
          SUBCHAPTER II--CLAIMS OF THE UNITED STATES GOVERNMENT
 
Sec. 3720A. Reduction of tax refund by amount of debt

    (a) Any Federal agency that is owed by a person a past-due, legally 
enforceable debt (including debt administered by a third party acting as 
an agent for the Federal Government) shall, and any agency subject to 
section 9 of the Act of May 18, 1933 (16 U.S.C. 831h), owed such a debt 
may, in accordance with regulations issued pursuant to subsections (b) 
and (d), notify the Secretary of the Treasury at least once each year of 
the amount of such debt.
    (b) No Federal agency may take action pursuant to subsection (a) 
with respect to any debt until such agency--
        (1) notifies the person incurring such debt that such agency 
    proposes to take action pursuant to such paragraph with respect to 
    such debt;
        (2) gives such person at least 60 days to present evidence that 
    all or part of such debt is not past-due or not legally enforceable;
        (3) considers any evidence presented by such person and 
    determines that an amount of such debt is past due and legally 
    enforceable;
        (4) satisfies such other conditions as the Secretary may 
    prescribe to ensure that the determination made under paragraph (3) 
    with respect to such debt is valid and that the agency has made 
    reasonable efforts (determined on a government-wide basis) to obtain 
    payment of such debt; and
        (5) certifies that reasonable efforts have been made by the 
    agency (pursuant to regulations) to obtain payment of such debt.

    (c) Upon receiving notice from any Federal agency that a named 
person owes to such agency a past-due legally enforceable debt, the 
Secretary of the Treasury shall determine whether any amounts, as 
refunds of Federal taxes paid, are payable to such person. If the 
Secretary of the Treasury finds that any such amount is payable, he 
shall reduce such refunds by an amount equal to the amount of such debt, 
pay the amount of such reduction to such agency, and notify such agency 
of the individual's home address.
    (d) The Secretary of the Treasury shall issue regulations 
prescribing the time or times at which agencies must submit notices of 
past-due legally enforceable debts, the manner in which such notices 
must be submitted, and the necessary information that must be contained 
in or accompany the notices. The regulations shall specify the minimum 
amount of debt to which the reduction procedure established by 
subsection (c) may be applied and the fee that an agency must pay to 
reimburse the Secretary of the Treasury for the full cost of applying 
such procedure. Any fee paid to the Secretary pursuant to the preceding 
sentence may be used to reimburse appropriations which bore all or part 
of the cost of applying such procedure.
    (e) Any Federal agency receiving notice from the Secretary of the 
Treasury that an erroneous payment has been made to such agency under 
subsection (c) shall pay promptly to the Secretary, in accordance with 
such regulations as the Secretary may prescribe, an amount equal to the 
amount of such erroneous payment (without regard to whether any other 
amounts payable to such agency under such subsection have been paid to 
such agency).
    (f)(1) Subsection (a) shall apply with respect to an OASDI 
overpayment made to any individual only if such individual is not 
currently entitled to monthly insurance benefits under title II of the 
Social Security Act.
    (2)(A) The requirements of subsection (b) shall not be treated as 
met in the case of the recovery of an OASDI overpayment from any 
individual under this section unless the notification under subsection 
(b)(1) describes the conditions under which the Commissioner of Social 
Security is required to waive recovery of an overpayment, as provided 
under section 204(b) of the Social Security Act.
    (B) In any case in which an individual files for a waiver under 
section 204(b) of the Social Security Act within the 60-day period 
referred to in subsection (b)(2), the Commissioner of Social Security 
shall not certify to the Secretary of the Treasury that the debt is 
valid under subsection (b)(4) before rendering a decision on the waiver 
request under such section 204(b). In lieu of payment, pursuant to 
subsection (c), to the Commissioner of Social Security of the amount of 
any reduction under this subsection based on an OASDI overpayment, the 
Secretary of the Treasury shall deposit such amount in the Federal Old-
Age and Survivors Insurance Trust Fund or the Federal Disability 
Insurance Trust Fund, whichever is certified to the Secretary of the 
Treasury as appropriate by the Commissioner of Social Security.
    (g) In the case of refunds of business associations, this section 
shall apply only to refunds payable on or after January 1, 1995. In the 
case of refunds of individuals who owe debts to Federal agencies that 
have not participated in the Federal tax refund offset program prior to 
the date of enactment of this subsection, this section shall apply only 
to refunds payable on or after January 1, 1994.
    (h)(1) \1\ The disbursing official of the Department of the 
Treasury--
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    \1\ So in original. Subsec. (h) contains two pars. designated (1) 
and (2).
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        (1) \1\ shall notify a taxpayer in writing of--
            (A) the occurrence of an offset to satisfy a past-due 
        legally enforceable nontax debt;
            (B) the identity of the creditor agency requesting the 
        offset; and
            (C) a contact point within the creditor agency that will 
        handle concerns regarding the offset;

        (2) \1\ shall notify the Internal Revenue Service on a weekly 
    basis of--
            (A) the occurrence of an offset to satisfy a past-due 
        legally enforceable non-tax \2\ debt;
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    \2\ So in original. Probably should not be hyphenated.
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            (B) the amount of such offset; and
            (C) any other information required by regulations; and

        (3) shall match payment records with requests for offset by 
    using a name control, taxpayer identifying number (as that term is 
    used in section 6109 of the Internal Revenue Code of 1986), and any 
    other necessary identifiers.

    (h)(2) \1\ The term ``disbursing official'' of the Department of the 
Treasury means the Secretary or his designee.
    (i) An agency subject to section 9 of the Act of May 18, 1933 (16 
U.S.C. 831h), may implement this section at its discretion.

(Added Pub. L. 98-369, div. B, title VI, Sec. 2653(a)(1), July 18, 1984, 
98 Stat. 1153; amended Pub. L. 101-508, title V, Sec. 5129(b), Nov. 5, 
1990, 104 Stat. 1388-287; Pub. L. 102-589, Sec. 3, Nov. 10, 1992, 106 
Stat. 5133; Pub. L. 103-296, title I, Sec. 108(j)(2), Aug. 15, 1994, 108 
Stat. 1488; Pub. L. 104-134, title III, Sec. 31001(u)(1), (v)(1), (w), 
Apr. 26, 1996, 110 Stat. 1321-375.)

                       References in Text

    The Social Security Act, referred to in subsec. (f)(1), is act Aug. 
14, 1935, ch. 531, 49 Stat. 620, as amended. Title II of the Act is 
classified generally to subchapter II (Sec. 401 et seq.) of chapter 7 of 
Title 42, The Public Health and Welfare. Section 204 of the Act is 
classified to section 404 of Title 42. For complete classification of 
this Act to the Code, see section 1305 of Title 42 and Tables.
    The date of enactment of this subsection, referred to in subsec. 
(g), is the date of enactment of Pub. L. 102-589, which was approved 
Nov. 10, 1992.
    Section 6109 of the Internal Revenue Code of 1986, referred to in 
subsec. (h)(3), is classified to section 6109 of Title 26, Internal 
Revenue Code.


                               Amendments

    1996--Subsec. (a). Pub. L. 104-134, Sec. 31001(v)(1), amended 
subsec. (a) generally. Prior to amendment, subsec. (a) read as follows: 
``Any Federal agency that is owed a past-due legally enforceable debt 
(other than any past-due support), including debt administered by a 
third party acting as an agent for the Federal Government, by a named 
person shall, in accordance with regulations issued pursuant to 
subsections (b) and (d), notify the Secretary of the Treasury at least 
once a year of the amount of all such debt.''
    Subsec. (h). Pub. L. 104-134, Sec. 31001(w), amended subsec. (h) 
generally. Prior to amendment, subsec. (h) read as follows: ``For 
purposes of this section--
        ``(1) the term `Federal agency' means a department, agency, or 
    instrumentality of the United States (other than an agency subject 
    to section 9 of the Act of May 18, 1933 (48 Stat. 63, chapter 32; 16 
    U.S.C. 831h)), and includes a Government corporation (as such term 
    is defined in section 103 of title 5, United States Code);
        ``(2) the term `past-due support' means any delinquency subject 
    to section 464 of the Social Security Act;
        ``(3) the term `OASDI overpayment' means any overpayment of 
    benefits made to an individual under title II of the Social Security 
    Act; and
        ``(4) the term `person' means an individual; or a sole 
    proprietorship, partnership, corporation, nonprofit organization, or 
    any other form of business association.''
    Subsec. (i). Pub. L. 104-134, Sec. 31001(u)(1), added subsec. (i).
    1994--Subsec. (f)(2). Pub. L. 103-296 substituted ``Commissioner of 
Social Security'' for ``Secretary of Health and Human Services'' 
wherever appearing.
    1992--Subsec. (a). Pub. L. 102-589, Sec. 3(1), amended subsec. (a) 
generally. Prior to amendment, subsec. (a) read as follows: ``Any 
Federal agency that is owed a past-due legally enforceable debt (other 
than any past-due support) by a named person shall, in accordance with 
regulations issued pursuant to subsection (d), notify the Secretary of 
the Treasury of the amount of such debt.''
    Subsec. (b)(3) to (5). Pub. L. 102-589, Sec. 3(2), struck out 
``and'' at end of par. (3), substituted ``(determined on a government-
wide basis) to obtain payment of such debt; and'' for ``to obtain 
payment of such debt.'' in par. (4), and added par. (5).
    Subsec. (g). Pub. L. 102-589, Sec. 3(5), added subsec. (g). Former 
subsec. (g) redesignated (h).
    Subsec. (h). Pub. L. 102-589, Sec. 3(3), (4), redesignated subsec. 
(g) as (h) and added par. (4).
    1990--Subsec. (a). Pub. L. 101-508, Sec. 5129(b)(1), struck out 
``OASDI overpayment and'' after ``other than any''.
    Subsecs. (f), (g). Pub. L. 101-508, Sec. 5129(b)(2), (3), added 
subsec. (f) and redesignated former subsec. (f) as (g).


                    Effective Date of 1994 Amendment

    Amendment by Pub. L. 103-296 effective Mar. 31, 1995, see section 
110(a) of Pub. L. 103-296, set out as a note under section 401 of Title 
42, The Public Health and Welfare.


                    Effective Date of 1992 Amendment

    Amendment by Pub. L. 102-589 effective as if enacted on Sept. 30, 
1992, see section 7 of Pub. L. 102-589, set out as a note under section 
3718 of this title.


                    Effective Date of 1990 Amendment

    Amendment by Pub. L. 101-508 effective Jan. 1, 1991, and 
inapplicable to refunds to which amendments by section 2653 of the 
Deficit Reduction Act of 1984, Pub. L. 98-369, do not apply, see section 
5129(d) of Pub. L. 101-508, set out as a note under section 6402 of 
Title 26, Internal Revenue Code.


                             Effective Date

    Section applicable with respect to refunds payable under section 
6402 of Title 26, Internal Revenue Code, after Dec. 31, 1985, see 
section 2653(c) of Pub. L. 98-369, as amended, set out as an Effective 
Date of 1984 Amendment note under section 6402 of Title 26.


   Clarification of Congressional Intent as to Scope of Amendments by 
                     Section 2653 of Pub. L. 98-369

    For provisions that nothing in amendments by section 2653 of Pub. L. 
98-369, enacting this section, be construed as exempting debts of 
corporations or any other category of persons from application of such 
amendments, with such amendments to extend to all Federal agencies (as 
defined in such amendments), see section 9402(b) of Pub. L. 100-203, set 
out as a note under section 6402 of Title 26, Internal Revenue Code.

                  Section Referred to in Other Sections

    This section is referred to in sections 3322, 3325 of this title; 
title 7 sections 2020, 2022; title 26 section 6402; title 42 sections 
404, 1008, 1320a-8, 1395ccc.
