# November 2002

## CB-02-16

SUBJECT: Federal Perkins Loan Program IRS Skiptracing Service

PUBLICATION REFERENCE: The Campus-Based Programs portion of the Federal
Student Financial Aid Handbook; Federal Perkins Loan Program
Regulations, 34 CFR, Part 674; and IRS Publication 1075 (Tax Information
Security Guidelines for Federal, State, and Local Agencies), revised
March 1999.

Dear Partner:

This letter explains the Internal Revenue Service (IRS)/Department of
Education (ED) Skiptracing Service.

**What is the Federal Perkins Loan Program IRS/ED Skiptracing Service?**

The IRS/ED Skiptracing Service helps locate borrowers who are or will be
going into default on repayment of their Federal Perkins Loans.

**How does it work?**

ED utilizes the IRS Skiptracing data to provide taxpayer addresses of
defaulted borrowers to schools participating in the Federal Perkins Loan
Program. The data are extracted monthly from the IRS Individual Master
File at its National Computer Center. The data on the IRS file are
updated weekly as new information is received about a taxpayer. The
major update of all IRS files based on the latest annual tax return is
usually accomplished by July of each year.

As a subscriber to this service, you would have the option of submitting
requests in the form of typed lists/computer printouts or magnetic tapes
(see Enclosure 3). Requests that we receive on listing/printouts will be
processed and the results returned in the form of computer listings.
Requests that we receive in the form of magnetic tape should be in the
format as described in Enclosure 1. ED and the IRS use the first four
(4) characters of the last name and the complete SSN for the Skiptracing
match. These must be provided in requests for the IRS Skiptracing
Services.

**What are the requirements for me to participate in this service?**

You must:

-   Be an active participant in the Federal Perkins Loan Program and

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-   Have a Campus-Based serial number (an identification number assigned
    by ED).

**Do I have to use this service?**

You are not **required** to use the IRS/ED Skiptracing Service for
carrying out the due diligence provisions of the Federal Perkins Loan
Program. Nonetheless, ED strongly encourages schools to use this
service. This service is one of the most powerful tools available to
schools for locating defaulted borrowers and is provided to schools
**free of charge**.

**What would I be required to do to participate?**

To participate in the program, you must submit a Safeguard Procedures
Report. In addition, you must provide ED with an annual Safeguard
Activity Report (an update to the Safeguard Procedures Report) by
September 30^th^ of each year thereafter. Each report is described
below:

**[Safeguard Procedures Report]{.underline}**

The Safeguard Procedures Report is a complete description of how you
process the federal tax return information (FTI) and the safeguards you
established to prevent unauthorized disclosure or use of the
information. A detailed description of the report is contained in
Section 7.0 of IRS Publication 1075 entitled Reporting Requirements.
Enclosure 4 to this document provides additional preparation
instructions.

**[Safeguard Activity Report]{.underline}**

In order to maintain eligibility in the IRS/ED Skiptracing Service, you
must submit an **annual update** to the Safeguard Procedures Report
called a Safeguard Activity Report. This report describes any changes
that have occurred since you last reported and anything that could be
demonstrative of safeguard efforts and/or awareness.

**Can a servicer/contractor prepare these reports or the requests for
information for me?**

You may have a servicer/contractor prepare these reports, but they must
be prepared according to the standards in Enclosure 4 and be signed by
an authorized official of your school. The servicer/contractor must also
file reports for their own facilities in accordance with these
requirements.

We do not process requests for FTI from entities other than the
principal subscriber (you). It is not acceptable for loan servicing
centers to submit skiptracing requests on behalf of institutions. The
principal subscriber must perform the proper certification of safeguard
reports and request transmittals. Under appropriate safeguards, FTI may
be furnished to servicers, but only the principal subscribers involved
may request it.

**What information will I receive if I participate in this service?**

You will receive a Federal Perkins Loan IRS Skiptracing Address Report
(Enclosure 2). The IRS data will be returned to ED by the first Friday
of the month. IRS tapes will be processed and the address data sent to
the requestors before the second week of the month. The total processing
time is approximately two weeks from the time the input is received
until the results are returned.

If a social security number (SSN) and name match is completed, the
latest street address, post office box number, or other address, city
state, and zip code furnished to IRS by the taxpayer will be provided.
The zip code is the five-digit code assigned by the Postal Service. The
two zeroes (00) in the last positions indicate that the area code (the
first three digits) could be obtained, but the zone could not. Zeroes in
all five positions indicate that the city or town could not be located
in the Zip Code File maintained by IRS.

**What is the deadline for my submissions?**

The Safeguard Procedures and Activity Reports are due no later than
**[September 30^th^ of each year]{.underline}**. You can review the
reporting requirements for schools that participate in the Federal
Perkins Loan Program approximately sixty (60) days on the Department's
website [www.ifap.ed.gov](http://www.ifap.ed.gov/) each year. Schools
that fail to submit these reports will be removed from the service for
the coming year. Reentry into the service will require submission of the
entire Safeguard Procedures or Activity Reports again.

**Where do I send my report?**

You should mail your reports to:

U. S. Department of Education

FFELP/Federal Perkins Loan Program IRS Skiptracing Service

P. O. Box 4132

Greenville, TX 75403-4132

**Where do I send my tapes?**

You should mail your tapes to:

U.S. Department of Education

FFELP/Federal Perkins Loan Program IRS Skiptracing Service

Computer Sciences Corporation

71 Deerfield Lane

2^nd^ Floor

Meridian, CT 06450

**How should I send the reports?**

You should mail the reports via the U. S. Postal Service only.
Commercial carriers such as Federal Express and United Parcel Service
cannot deliver to the above address.

**Who should I call if I have a question about this letter?**

If you have any questions regarding these procedures, please telephone
Pamela Wills at (202) 377-3184 or e-mail her at <Pamela.Wills@ed.gov>.
You may also contact Gregory Plenty at

\(202\) 377-3253 or e-mail him at [Gregory.Plenty@ed.gov]{.underline}

Sincerely,

Richard Coppage

Acting Director

Campus-Based Operations

Enclosure 1 Input/Output Layouts

Enclosure 2 Hard Copy Output Layout

Enclosure 3 Transmittal Letter

Enclosure 4 Supplemental Instructions for Safeguard Procedures Report

Enclosure 5 Fact Sheet for Protection of Federal Tax Return Information

**Enclosure 1: Input/Output Layouts**

A.  [HARDCOPY INPUT CENTER]{.underline}

There must be a transmittal (enclosure 3) accompanying the typed or
computer - generated listings. If a computer listing is sent, indicate
the columns/fields with the social security number and last name of the
student.

At the top of each page of data, put the data and the Campus-Based
serial number.

The following data are required on the listing:

Social Security Number

Student Name (list last name only - up to 13 characters)

B. [TAPE INPUT]{.underline}

Tape Characteristics:

Recording mode -Fixed length EBCDIC

Internal labels -Unlabeled

Track -Nine

Parity -Odd

Density -1600 Bits per inch

Blocking -100 Records

Record length -30 Characters

Block length -3000 Characters

Data format is:

REQUESTOR RECORD (The first data record must be a requestor record).

[FIELD \#]{.underline} [COLUMNS]{.underline} [\# OF DIGITS]{.underline}
[DESCRIPTION]{.underline}

1\. 1 - 3 3 -CONSTANT REG

2\. 4 - 9 6 Campus-Based Serial Number

3\. 10 - 16 8 -Date of Input Creation

(DD/MM/YY)

4\. 17 - 30 13 -Blank

DATA RECORD

[FIELD \#]{.underline} [COLUMNS]{.underline} [\# OF DIGITS]{.underline}
[DESCRIPTION]{.underline}

1\. 1 - 9 9 -Social Security Number

2\. 10 - 22 13 -Student Last Name (left justify

> blank fill)

3\. 23 - 28 6 -School ID number

> of students (Campus-Based)

4\. 29 - 30 2 -Blank

D. [OUTPUT TAPE LAYOUT]{.underline}

Tape Characteristics:

Recording mode -Fixed length EBCDIC

Internal labels -Unlabeled

Track -Nine

Parity -Odd

Density -1600 Bits per inch

Blocking -24 Records

Record Length -180 Characters

Block Length -4320 Characters

End of tape may have a 1 EOV or 1 EOF. for end of file.

REQUESTOR RECORD (The first output record will be a 180 character
requestor record.)

[FIELD \#]{.underline} [COLUMNS]{.underline} [\# OF DIGITS]{.underline}
[DESCRIPTION]{.underline}

1\. 1 - 3 3 -Constant REQ.

2\. 4 - 9 6 -Campus-Based Serial Number

3\. 10-180 170 -Blanks

DATA RECORD

[FIELD \#]{.underline} [COLUMNS]{.underline} [\# OF DIGITS]{.underline}
[DESCRIPTION]{.underline}

1\. 1 - 9 9 -Social Security Number

2\. 10 - 22 13 -Student Last Name

3\. 23 - 28 6 -Campus-Based Serial Number

4\. 29 - 63 36 -First Name Line

(This is the taxpayer's name

as shown on the return. It

will be left justified, blanks

filled. This field may also

include the spouse name.

(See Note)

5\. 62 - 96 35 -Second Name Line or Optional

> Street Address. (This represents up to 35 characters of a second name
> if shown on the

return such as in care of, executor,

etc. This field is left justified with

blanks used to fill the unused portion

of the field.)

6\. 97 - 131 35 -Address

7\. 132 - 156 25 -City and State

8\. 157 - 161 5 -Zip Code

9\. 162 - 165 4 -Blanks

10\. 166 1 -Code 1\" = Matched IRS File

2\" = Matched IRS File

(Name was Different)

3\" = SSN for this record

At IRS

11\. 167 - 180 7 -Blanks

Note: The IRS is not providing the name of the individual if there has
been a name

change due to marriage or some other legal action.

**Enclosure 2: Hard Copy Output Layout**

FEDERAL PERKINS LOAN IRS SKIPTRACING ADDRESS REPORT

REQ SUB ID: Campus-Based Serial Number

\--INPUT DATA\-- \--IRS DATA\-- \--IRS STATUS\--

SSN NAME STUDENT NAME AND

ADDRESS

111 11 1111 NAME JOHN A SMITH MATCHED

\% LARRY SMITH

1888 GLORIOUS LANE

SMITHFIELD, VA 22999

222 22 2222 JOHNSON PAUL M JOHNSON MATCHED

3333 FAIRVALE DR

EUGENE, OR 96969

333 33 3333 VALLEE DOROTHY VALLEE MATCHED

PO BOX 999

6100 FOXHALL DR

ATLANTA, GA 40444

444 55 5555 JONES NO SSN AT IRS

**Enclosure 3: Transmittal Letter**

THE ACCOMPANYING MATERIAL IS INPUT TO THE FEDERAL PERKINS

LOAN PROGRAM IRS SKIPTRACING SYSTEM

I certify that the information secured through the use of this service
will be used in accordance with the provisions of the Internal Revenue
Code, (26, SEC.7213, and SEC.7431) exclusively for the purpose of
locating borrowers who have defaulted on their Student Loans.

The undersigned hereby accepts all responsibility for adherence to these
provisions under penalty of law.

\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\--

Signature

Of Authorized Official

\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\--

Authorized Official

Typed Name and Title

\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\--

Date

Number of Requests
Submitted\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Requestor ID
Number\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Point of Contact: Name
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Address
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Phone
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Method of Submission: \_\_\_\_\_\_\_\_ Typed List

> \_\_\_\_\_\_\_\_ Tape (Tape \# \_\_\_\_\_\_\_\_\_\_\_\_)

**Enclosure 4: Supplemental Instructions**

**For Safeguard Procedures Report (SPR)**

Outlined below are comments, which clarify the preparation instructions
in IRS Publication 1075 as they pertain to educational institutions. The
numbers referred to below are the same as numbered in this publication.

The SPR [must]{.underline} be on the institution's letterhead, signed by
the head of the agency or delegate, dated, and include the following
information:

1.  Responsible official

The name, title, and telephone number of the agency official authorized
to request FTI from the IRS. You must include the name of a contact
person if someone other than the named official performs the day-to-day
operation of the program.

2.  Location of the data

An organizational chart or narrative description of the receiving
agency, that includes all functions within the agency where FTI will be
processed or maintained. (Be sure to indicate which office will actually
receive and utilize the FTI.)

-   Board of Trustees

-   President

-   Executive Assistant to President

-   Director

-   Office of Vice President for Academic Affairs

-   Office of Vice President for Research

-   Office of Vice President for Business and Finance

-   Director of Financial Affairs \*\* (**\*\* indicates where data are
    used**)

-   Director of Purchasing

-   Director of Financial Aid

3.  Flow of data

A chart or narrative describing the flow of FTI through the agency from
receipt to its destruction, how it is used or processed, and how it is
protected. Indicate if the FTI is commingled or transcribed into data
kept by the agency.

4.  System of records

Agencies are expected to be able to provide an "audit trail" for
information requested

and received.

5.  Secure storage of the data

A description of the security measures employed to provide secure
storage for the data when it is not in current use. Secure storage
includes such diverse considerations as locked files or containers,
secured facilities, key or combination controls, off-site storage, and
restricted areas.

6.  Limiting access to the data

A description of the procedures or safeguards employed to ensure access
to the FTI is limited to those individuals who are authorized access and
have a need-to-know. Describe how the authorized recipient(s) will
protect the information from unauthorized access when in use.

The physical barriers to unauthorized access should be described
(including the security features of the facilities where FTI is used or
processed) and systemic or procedural barriers.

7.  Disposal

A description of the method(s) of disposal of the different types of FTI
provided by the IRS when not returned to the IRS. Approved methods of
destruction include:

-   Burning --Burn in an incinerator that produces enough heat to burn
    the entire bundle or separate the bundle to ensure all pages are
    consumed.

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-   Shredding -- Paper should be shredded to effect 5/16 inch wide or
    smaller and microfilm should be shredded to effect 1/35 inch by 3/8
    inch strips.

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-   Pulping -- Should be accomplished so that all material is reduced to
    particles of one inch or smaller.

**Note:** Tearing data in half several times and placing in office trash
containers or burying in a landfill are not acceptable methods of
destruction.

8.  Computer security

All computer systems processing, storing, and transmitting FTI must have
computer access protection controls. (This includes microprocessors and
mainframe systems, LANs, WANs, or Internets, and personal
computers/notebooks/laptops. If used, personal computers, etc. must
include instructions on what security precautions are in place to
prevent unauthorized disclosure or access to include disks, etc.)

9.  Agency disclosure awareness program

Each agency receiving FTI must have an awareness program that annually
notifies all employees having access to FTI of the confidentiality
provisions of the IRS, a definition of what returns and return
information is, and the civil and criminal sanctions for unauthorized
inspection or disclosure.

**Enclosure 5: Fact Sheet for Protection**

**Of Federal Tax Return Information (FTI)**

-   Safeguards

Schools must establish and maintain, to the satisfaction of the IRS and
ED, safeguards designed to protect the confidentiality of FTI. In order
to participate in the Federal Perkins Loan Program IRS/ED Skiptracing
Service, each school must provide a Safeguard Procedure Report
describing the procedures established and utilized to assure the
continuous protection and confidentiality of FTI.

-   Prohibitions

Schools and their agents are prohibited from using FTI furnished by the
IRS for any purpose other than locating persons who have defaulted on a
Federal Perkins Loan.

-   Commingling

The IRS requires that FTI be maintained separately, so we urge that FTI
not be commingled with other information in files. The FTI must always
be in a locked facility (desk or cabinet) when not being used by an
authorized employee. If the FTI is placed in case files or folders, the
entire file must be identified as containing FTI and safeguarded
(locked). Maintaining FTI separately allows a convenient and economical
method to secure a small volume of data rather than a large volume of
case files.