# Presentation: 759014

## CAB Forum

- Treasury Offset Program
- August 23–24, 2006

## Treasury Offset Program

-   TOP is a system that compares     	payments with debts.
-   When a match occurs the payment is 	offset to collect the debt.

## Administrative Offset – TOP

- What is offset?
- Withholding funds payable by the
- United States
- to a person to satisfy a debt.

## Administrative Offset – TOP

-   _Requires_ agencies to notify Treasury      	of all debts over 180 days delinquent for 	purposes of offset
-   _Requires_ disbursing officials to offset 	payments

## TOP Process

***PAYMENTS ***

***TOP***
***Database***

***DEBTS***

**Does payee name &**
**TIN match debtor**
**name & TIN?**

**No**

**Yes**

**Check or EFT**
**to payee**

**$$ to creditor**
**agency**

**Notice to debtor**

## Offset Notice

- Contains:
-   Date and amount of offset
-   Agency  to which money was sent
-   Point of contact at the agency

## TOP – Payments

- All Federal Payments:

-   Federal tax refunds
-   Federal retirement
-   Federal benefits
-   Federal salary
-   Vendor payments to government contractors
-   Federal employee travel advances & travel
-      reimbursements

## TOP – Exemptions/Payments

-   Payments exempted by law, e.g. student 	loan payments, veterans’ benefits
-   Payments exempted by Treasury
-   Means-tested payments
-   Non means-tested payments – if offset   	would tend to interfere with or defeat the 	purpose of the program

## Priority of Debts in TOP

-   IRS Income Tax Debts
-   Child Support Debts (TANF)
-   Federal Non-Tax Debts
-   Child Support Debts (Non-TANF)
-   State Income Tax Debts

## Priority of Debts in TOP

-   When more than one debt is submitted 	for the same debtor, TOP applies funds 	collected in accordance with priorities set 	by statue and policy.
-   If a debtor has two or more debts for the 	same priority, TOP applies funds to the 	oldest debt first.

## TOP – Exemptions/Debts

-    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

##        Joint and Several Liability

-   Allows TOP to link multiple debtors to 	a single debt
-   Allows agencies to submit their Joint 	and Several debts as a single debt

-        Joint and Several Liability

## Centralized Salary Offset (CSO)

-   Federal agencies collect debts owed by a 	Federal Employee through installment 	deductions from the employee’s pay.
-   15% of “disposable pay” for Federal non-	tax debts

- Salary Offset Limits

## What is Disposable Pay?

- The dollar amount left after the following deductions:
-   Tax levies
-  	Properly withheld taxes, FICA, Medicare
-   Health and life insurance premiums
-   Retirement contributions
*Does NOT include amounts deducted under a garnishment*

## What’s Different for CSO?

-   Minimum amount of a debt referred    	for Salary Offset is $100
-   Salary Offset will always take the debt 	balance to zero
-   TOP does not take the offsets
-   SPA offsets salary payment

##        Centralized Salary Offset (CSO)

- Participating Salary Paying Agencies:
-   Department of the Interior
-   National Finance Center
-   Department of Defense - DFAS
-   U.S. Postal Service
-  General Services Administration

## State Reciprocal Program

- States will refer debts to TOP for offset against Federal vendor payments and State payments will be matched against Federal debts.
- Working on the draft rule on Administrative Offset Under Reciprocal Agreements with States.
- Pilot to begin in the third quarter of Calendar Year 2007 with Maryland, New Jersey and Kentucky.

## TOP - Agency Requirements

-   Privacy Act Notices
-   Due Process - 60 day notice
-   Certification
-   Compliance with agency specific           	statutes (if any) and regulations

## TOP – How to Participate

-   Agency Profile Input Form
-    Security Access Request Form
-    Transmission Method

## TOP - Agency Profile Input Form

-   The Agency Profile Input Form 	provides information about participating 	Creditor Agencies
-   Agency Name, Address, Debtor Contact 	Information are provided to the debtor 	on offset notices
-   Agency Location Codes are used to 	IPAC 	monies collected

## TOP - Agency Profile Input Form

-   Can agency reduce debt balance to $0.00
-   Are fees to be paid by the debtor or the 	agency?
-   Type of payments to be bypassed
-   Transmission Method
-   Debt Types to be offset

## TOP - Agency Profile Input Form

-   At a minimum, should be reviewed 	annually
-   Should be updated when any change 	occurs within the agency

- Mail to:
- 	Department of the Treasury
- 	FMS, Treasury Offset Program
- 	401 14th Street S.W.  Room 228B
- 	Washington, DC 20227
- Or Fax to:
- 	Attn: Manager, TOP Operations Branch (c/o Horace Tate)
- 	202-874-6474

##    TOP - Security Access Request Form

- The Security Access Request Form is used to request access to the:
-   TOP Client
-   FMS Mainframe to transmit files.

##    TOP - Security Access Request Form

-   Employee Name, Agency Name & Address
-   Type of access needed
-   Transmission Method
- 		(SecurID or Network to Network)
-   Supervisors Name
-   FPA Security Point of Contact
-   Operating System

- Information needed on form:

##    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 14th Street S.W.,  Room 213B
- 	Washington, DC  20227
- 	Attn: Katrina Gonzalez

-    TOP - Security Access Request Form

## TOP - Transmission Method

- CONNECT:Direct
-   Dataline from creditor agency to FMS
-   Frame:Relay – Dataline to nearest Sprint 			     Location
- CONNECT:Mailbox
-   Manual process using Modem to transmit 	files to FMS

## TOP - Transmission Method

- The Client:
-   Online input of debt information
-   Usually for smaller agencies with a low 	volume of debt

## As of June 30, 2006

**  ****$****36.2 ****billion in Federal Non-Tax Debts.**
**  ****$****86.1**** billion in Child Support Debts.**
**  ****$****129.4**** billion in Federal Tax Debts.**
**  ****$****5.7**** billion in State Income Tax Debts.**
**  ****	****	****	****Total - $****257.5**** billion! **

- TOP database contains–

## CY Collections Through TOP 

**  ****Tax Refund Offset **
**       ****Child Support****	****	****	****$****1.4**** billion**
**  ****Tax Refund Offset **
**        ****Federal Non-Tax Debt****	****	****$****950.5**** million**
**   ****Tax Refund Offset **
**        ****State Income Tax Debt****	**** ****	****$****189.4**** million**
**   ****Tax Levy****	****	****	****	****$****164.9**** million**

- CY Collections Through TOP
- As of July 12, 2006

##  DMS FEES

-   DMS is reimbursable is
-  Offset Fee for Fiscal Year 2006:
- $15.00
**For Salary Offset, Salary Paying Agency may charge an additional fee*

## Debt Management 

- Operations Center

*Operates the National TOP Call Center*
*1-800-304-3107*
*CY2005  – 3 million calls*

*Callers are referred to creditor agency for–*
*  *Account balances
-   Particular debt information
-   Removal from TOP
-   Adjustments or refunds

## Purpose:

-   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. §  3720B and 31 C.F.R. §285.13).
-   To Provide an Online Resource on Delinquent Debtors for Federal Agencies for Purposes of Carrying Out the Law.

##   Debt Check is a 2 factor, level 3 security application

**  **Debt Check is a 2 factor, level 3 security application
-   Issuing Public Key Infrastructure (PKI) certificates
-   Pilot phase with USDA
-   Small Business Administration is currently in 	production
-   Exploring the option of a Portal Between CAIVRS and 	Debt Check.

## 
   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.

-    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**.**

## Authority

-   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. § 3720B and 	31 C.F.R. § 285.13).

## Authority 

-   Executive Order 13019 extends this bar to 	delinquent child support debtors whose 	debts 	have been referred to the Treasury 	Offset Program for administrative offset.
-   Currently, the bar has not been extended to 	Federal or State tax debt.

## Debt Program Division

-   Dean Balamaci, Director		           (202) 874-0540
-   Rosemary McCambridge, Manager         (202) 874-6727
-      Debt Program Relations Branch
-   Alyssa Riedl, Manager		           (202) 874-6859
-      Debt Program Support Branch

## Questions