(rev. October 12, 2016) 

What is the DCIA?

In response to a steady increase in 

the amount of delinquent non-tax 

debt owed to the United States, and 

concern that appropriate actions 

were not being taken to collect this 

delinquent debt, Congress passed 

the Debt Collection Improvement Act 

of 1996 (DCIA). This law centralized 

the governmentwide collection of 

delinquent debt and gave the U.S. 

Department of the Treasury 

significant new responsibilities in this 

area. The Bureau of the Fiscal 

Service is responsible for Treasury's 

implementation of the debt collection 

provisions of the DCIA. 

Background

Prior to passage of the DCIA, 

Treasury and the Financial 

Management Service—now the 

Bureau of the Fiscal Service—

assisted the Office of Management 

and Budget (OMB) in providing 

federal agencies with guidance on 

collecting debts owed to the federal 

government. 

After passage, Fiscal Service also 

assisted agencies in collecting 

delinquent debts through the Internal 

Revenue Service (IRS) operated tax 

refund offset program, collecting 

debts through salary offset, and 

using a governmentwide contract 

available to federal agencies to refer 

delinquent debts to private collection 

agencies (PCAs). 

Fiscal Service was an appropriate 

agency to conduct centralized debt 

collection operations for the federal 

government, due to its accumulated 

knowledge of debt collection 

practices and procedures, and its 

position as the disbursing agency for 

more than 85 percent of federal 

payments.

Debt collection 

programs

The DCIA requires federal agencies to refer 

delinquent non-tax debts to Fiscal Service 

for collection by offset of non-tax payments. 

Non-tax payments include vendor, federal 

retirement, federal salary, and Social 

Security benefits. Currently, all OPM 

retirement, vendor, SSA benefit payments 

and some federal salary payments are 

being offset. 

It also gave responsibility to Fiscal Service 

to offset tax refund payments. The Treasury 

Offset Program (TOP) compares the names 

and taxpayer identifying numbers (TINs) of 

debts with the names and TINs of recipients 

of federal payments. If there is a match, the 

federal payment is reduced, or "offset," to 

satisfy the overdue debt. 

TOP incorporates other offset processes, 

particularly: (1) the tax refund offset 

program, formerly operated by the IRS, 

which was merged into TOP in January 

1999; (2) levies served by the IRS for the 

collection of delinquent tax debt in 

accordance with the Taxpayer Relief Act of 

1997; and (3) collection of state income tax 

debts by offset of federal income tax refunds 

as mandated by the 1998 Internal Revenue 

Service Restructuring and Reform Act. TOP 

also collects delinquent debts owed to 

states. 

Cross-Servicing, the Fiscal Services’ other 

primary debt collection program, uses a 

variety of tools to encourage debtors to 

repay the federal government. Federal 

agencies are required to refer eligible 

delinquent (over 120 days) non-tax debts to 

Treasury for debt collection. 

Debts referred to Fiscal Service include 

unpaid loans, overpayments or duplicate 

payments made to federal salary or benefit 

payment recipients, misused grant funds, 

and fines, improper payments to vendors, 

penalties or fees assessed by federal 

agencies.

FACT SHEET

Debt Collection and the Debt Collection Improvement Act of 1996 (DCIA)

Fiscal Service sends demand letters to 

debtors on Treasury letterhead, and 

enters into repayment arrangements 

with debtors. The Cross-Servicing 

Program administers a contract with 

PCAs who provide delinquent debt 

collection services and Fiscal Service 

refers debts to these PCAs. 

Debt collection 

provisions of the 

DATA Act of 2014 

The Digital Accountability and 

Transparency Act (DATA Act), Pub. L. 

113-101, signed into law on May 9,

2014, amends 31 U.S.C. 3716(c)(6)

and requires agencies to refer to

Treasury valid, delinquent non-tax

debts for the purpose of administrative

offset at 120 days - 60 days earlier

than the previous 180-day requirement.

The DATA Act also directs Treasury to 

report to Congress on agency 

compliance with the new administrative 

offset referral requirement. 

For more information about the DCIA 

and other debt collection authorities, 

please contact the DMS at (202) 874-

6810 or visit our Web site at 

https://fiscal.treasury.gov/debtmanagement/about/about-dcia.html

ABOUT FISCAL SERVICE 

AND DEBT MANAGEMENT 

SERVICES 

The U.S. Department of the Treasury’s Bureau 

of the Fiscal Service assists federal agencies 

with the prevention, collection and resolution of 

debts owed to government agencies. 

Additionally, we provide debt collection 

services to the states. Debt Management 

Services (DMS) is the business area 

responsible for administering programs and 

services related to improper payments, 

receivables management and delinquent debt 

collection.