COMPARISON OF 

Obsolete Federal Claims Collection Standards 

(4 CFR Chapter II Parts 101-105) 

TO 

Proposed & Final Federal Claims Collection Standards 

(31 CFR Chapter IX Parts 900-904) 

NOTE: This document contains a summary of the provisions of the 

obsolete, proposed & final FCCS. Readers should review the actual text 

of the obsolete, proposed & final FCCS for a complete understanding of 

the information summarized in this document. 

November 22, 2000 
TABLE OF CONTENTS

Obsolete FCCS Proposed FCCS Final FCCS Pages 

Part 101 - Scope of Standards 

Part 102 - Standards for the Administrative 

Collection of Claims 

Part 103 - Standards for the Compromise of 

Claims 

Part 104 - Standards for Suspending or 

Terminating Collection Action 

Part 105 - Referrals to Department of Justice 

or GAO 

Part 900 - Scope of Standards 

Part 901 - Standards for the Administrative 

Collection of Claims 

Part 902 - Standards for the Compromise of Claims 

Part 903 - Standards for Suspending or 

Terminating Collection Activity 

Part 904 - Referrals to Department of Justice 

Part 900 - Scope of Standards 

Part 901 - Standards for the 

Administrative Collection of Claims 

Part 902 - Standards for the Compromise 

of Claims 

Part 903 - Standards for Suspending or 

Terminating Collection Activity 

Part 904 - Referrals to Department of 

Justice 

1 - 2 

3 - 8 

9 - 10 

10 - 12 

13 

November 22, 2000 
OBSOLETE FCCS PROPOSED FCCS FINAL FCCS 

PART 101 - SCOPE OF STANDARDS PART 900 - SCOPE OF STANDARDS PART 900 - SCOPE OF STANDARDS 

101.1 Prescription of standards 900.1 Prescription of standards 900.1 Prescription of standards 

� Joint promulgation by General Accounting Office (GAO) & � Joint promulgation by Treasury & Justice; GAO �Adopts proposed rule. 

Department of Justice (DOJ) eliminated as a co-promulgator �Adds that standards and policies regarding the 

� FCCS prescribe standards for the administrative collection, � Adds reference to offset classification of debt for accounting purposes 

compromise, termination of agency collection, and the referral � Specifies federal agencies included -- executive, (write off) are in Office of Management and Budget 

to GAO & DOJ legislative, judicial, Government corporations (OMB) A-129. 

� Agencies adopt FCCS standards; agency regulations � Adds that claims are governed by the Bankruptcy Code 

subject to GAO review � Updates the list of other Government publications 

� Lists other Government publications containing debt containing debt collection guidance 

collection guidance � Additional rules governing Debt Collection 

Improvement Act of 1996 (DCIA) offset and debt 

collection provisions will be published separately 

� Clarifies that agencies are not limited to collection 

remedies contained in the FCCS; FCCS not intended to 

impair common law remedies 

101.2 Definitions 900.2 Definitions and construction 900.2 Definitions and construction 

� (a) Defines “debt” and “claim” � (a) Revises definition of “debt” and “claim” to conform �Adopts proposed rule. 

� (b) Defines “delinquent” with DCIA; includes State, Territories & D.C. debts 

� (c) Defines “referral for litigation” (including past-due child support) for administrative offset 

� (d) Clarifies drafting usage of common terms purposes 

� (b) “Delinquent” definition unchanged 

� (c) Clarifies drafting usage of common terms 

� (d) Adds definition of “recoupment” 

� (e) Adds definition of “Secretary” as Secretary of the 

Treasury, or the Secretary’s delegate 

� “Referral for litigation” definition deleted 

101.3 Antitrust, fraud, tax, and interagency claims excluded 900.3 Antitrust, fraud, and tax and interagency claims 900.3 Antitrust, fraud, and tax and interagency 

� (a) FCCS do not apply to collection of claims involving excluded claims excluded 

violation of antitrust laws, fraud, false claim, or � (a) Unchanged �Adopts proposed rule. 

misrepresentation; DOJ has exclusive discretion to apply � (b) Reworded 

FCCS to such claims � (c) Adds reference to EO 12146 re agencies resolving 

� (b) Excludes tax claims disputes; removals referral to GAO 

� (c) Excludes claims between Federal agencies 

101.4 Compromise, waiver, or disposition under other 900.4 Compromise, waiver, or disposition under other 900.4 Compromise, waiver, or disposition under 

statutes not precluded statutes not precluded other statutes not precluded 

� FCCS not intended to preclude claims collection under � Unchanged, except deletes language that FCCS should �Adopts proposed rule. 

statutes and regulations other than 31 USC 3701 et seq. be followed unless required otherwise by law 

-1- November 22, 2000 
OBSOLETE FCCS PROPOSED FCCS FINAL FCCS 

101.5 Conversion claims 900.5 Form of payment 900.5 Form of payment 

� FCCS covers recovery of property, in addition to recovery � Title change and reworded; claims may be paid in �Adopts proposed rule. 

of money money or property, if contractually authorized 

101.6 Subdivision of claims not authorized 900.6 Subdivision of claims not authorized 900.6 Subdivision of claims not authorized 

� Agencies may not subdivide claims to avoid requirement � Reflects statutory increase in agencies’ authority to �Adopts proposed rule. 

that claims over $20,000 be referred to DOJ for litigation, $100,000, or such higher amount as the Attorney General 

compromise or suspension or termination of collection may prescribe 

activity 

101.7 Required administrative proceedings 900.7 Required administrative proceedings 900.7 Required administrative proceedings 

� FCCS not intended to supersede or duplicate administrative � Reworded �Adopts proposed rule. 

collection proceedings required by contract or other laws 

101.8 Omissions not a defense 900.8 No private rights created 900.8 No private rights created 

� An agency’s failure to comply with the FCCS is not � Title changed and reworded �Adopts proposed rule. 

available as a defense to debtors 

-2- November 22, 2000 
OBSOLETE FCCS PROPOSED FCCS FINAL FCCS 

PART 102 - STANDARDS FOR THE ADMINISTRATIVE PART 901 - STANDARDS FOR THE PART 901 - STANDARDS FOR THE 

COLLECTION OF CLAIMS ADMINISTRATIVE COLLECTION OF CLAIMS ADMINISTRATIVE COLLECTION OF CLAIMS 

102.1 Aggressive agency collection action 901.1 Aggressive agency collection activity 901.1 Aggressive agency collection activity 

� (a) Agencies shall take aggressive action to collect claims; � (a) Reference to GAO removed and reference to �Adopts proposed rule. 

DOJ or GAO not required to duplicate agencies’ collection Treasury and Treasury-designated debt collection centers 

actions added; clarifies that FCCS applies to agencies collecting 

� (b) Agencies expected to cooperate with each other in debt their own debt or debt referred for debt collection services 

collection activities (cross-servicing) 

� (c) Mandates cooperation among agencies 

� Adds reference to DCIA debt collection provisions: 

� (b) Debts referred or transferred to Treasurydesignated debt collection center for collection 

are serviced in accordance with statutory 

requirements 

� (d) Agencies should consider referral of debts 

less than 180 days delinquent to Treasurydesignated debt collection centers 

� (e) Debts 180+ days delinquent must be 

transferred to Treasury for collection; DCIA 

exemptions listed 

� (f) Agencies authorized to deduct fees for crossservicing from collections; fees may be added to 

debt as administrative cost 

-3- November 22, 2000 
OBSOLETE FCCS PROPOSED FCCS FINAL FCCS 

102.2 Demand for payment 901.2 Demand for payment 901.2 Demand for payment 

� (a) Demand letter requirements, generally 3 progressively � (a) Demand letter requirements modified to discretion of �Adopts proposed rule. 

stronger demand letters; if necessary to protect Government’s the agency; suggestion that 1 letter generally sufficient �(b)(3) Amended to clarify that the term “late 

interest, legal action may precede demand � (b) & (c) Adds inclusion of agency contact in demand charges” refers to interest, penalties, and 

� (b) General content of demand letter, including basis for letter administrative costs. 

indebtedness, rights of debtor, standards for assessment of � (d) Demand letter should also include new DCIA 

interest, penalties and costs, and payment due date requirements and authorities, such as transfer or referral of 

� (c) Demand letter should include: debt to Treasury and Treasury-designated debt collection 

consider repayment alternatives, policies re use of credit centers; administrative, salary & tax refund offset 

bureau reporting and collection services, intent to litigate, remedies; administrative garnishment 

debtors’ rights to waiver, if any � (e) Unchanged from former (d) 

� (d) Agencies should respond to debtors’ communications � (f) Reworded from former (e) 

within 30 days and advise debtor to submit evidence to � (g) Adds Executive Order 12988 requirement that 

support contentions debtors be informed of agencies’ intent to refer to DOJ for 

� (e) Coordination of demand letters with offset notice litigation 

requirements � (h) Adds requirement that agencies consider 

Bankruptcy Code requirements for debtors in bankruptcy 

agencies’ willingness to 

-4- November 22, 2000 
OBSOLETE FCCS PROPOSED FCCS FINAL FCCS 

102.3 Collection by administrative offset 901.3 Collection by administrative offset 901.3 Collection by administrative offset 

� (a) Administrative offset governed by FCCS and agency’s � (a) Describes 2 types of administrative offset: offset by �Redrafted to emphasize that disbursing official 

regulations; collection by offset required when feasible and non-disbursing officials and offset by disbursing officials offset, which is renamed as centralized 

not otherwise prohibited as determined on a case-by-case (DCIA); for both types of administrative offset, agency administrative offset in the final rule, is the primary 

basis; prescribes circumstances when offset might not be regulations required; exceptions apply to: (i) claims arising administrative offset collection tool, consistent with 

appropriate under Social Security Act, (ii) payments under Social the DCIA. Non-disbursing official administrative 

� (b) Confirms applicability of FCCS to administrative offset Security Act, except as provided for under DCIA, (iii) offset process, which is renamed as non-centralized 

under 31 USC 3716, except as otherwise provided; agencies claims or payments under IRC or tariff laws, (iv) salary administrative offset in the final rule, is a backup 

required to prescribe offset regulations that include: offset if procedures inconsistent with FCCS, (v) judgments procedure to be used by creditor agencies on an ad 

appropriate procedural due process rights i.e. notice of debt against U.S. governed by 31 USC 3728, (vi) offsets hoc case-by-case basis when centralized 

and agency’s intent to collect by offset and debtor’s rights to specifically prohibited (exception no longer applies with administrative offset is otherwise not available or 

review records, to a hearing and to enter into repayment offset is otherwise “provided for”), (vii) offsets in the appropriate. 

agreement (at agency’s discretion); agencies required to course of judicial proceedings, including bankruptcy; � (a) Defines “administrative offset” as having the 

establish procedures to offset payments when requested by claims against State or local Governments are now subject same meaning provided in DCIA; sets forth 

another agency; offset may not be initiated more than 10 to offset; pre-offset notice by agencies unchanged; exceptions to administrative offset and describes 

years after right to collect has accrued except under certain, agencies need not duplicate due process steps provided applicable regulations (e.g., Federal benefit offset 

limited circumstances; debts that may not be collected under to debtor; hearing requirements unchanged; 10-yr. covered in 31 CFR § 285.4); common law offset and 

3716 offset include: claims against State or local Government, limitation unchanged other types of statutory offset may be used when 

debts arising under Social Security Act, Internal Revenue � (b) Procedures for administrative offset by non­ applicable; 10-year limitation unchanged; 

Code (IRC) or tariff laws, or when otherwise provided for or disbursing official, i.e. on a case-by-case basis; describes Bankruptcy Code applies to bankruptcy cases. 

prohibited by statute; common law offset or offset under when offset may occur prior to notice to debtor; agencies �(b) Procedures for mandatory centralized 

other authority not precluded; prescribes when offset may be required to cooperate and comply with offset requests administrative offset as set forth in proposed 

taken prior to notice from other agencies § 901.3(c); clarified that required due process notice 

� (c) Prescribes type of hearing or review required, when � (c) DCIA requirements re administrative offset by must be “sent” to debtor, rather than “received” by 

agency is required to afford hearing or review; oral hearing disbursing officials: debtor. 

not required unless credibility issues are involved � Disbursing officials required to offset payments �(c) Procedures for non-centralized administrative 

� (d) Agencies should cooperate and comply with offset to collect debts certified to Secretary offset as set forth in proposed § 901.3(b); to be 

requests from other agencies � Agencies will certify that debts forwarded to used only when centralized administrative offset is 

� (e) Offset against judgments against the U.S. governed by Treasury for centralized administrative offset are not available or appropriate. 

31 USC 3728 delinquent and enforceable, and that pre-offset �(d) Procedures for referral to OPM of requests to 

� (f) Requires written certification that agency seeking to requirements of 31 USC 3716(a) and regulations offset a debtor’s anticipated or future benefit 

collect debt by offset through another agency has complied have been met payments under the Civil Service Retirement and 

with pre-offset requirements � Agencies required to submit 180+ days Disability Fund (Fund) payments as set forth in 

� (g) Amounts recovered by offset applied to multiple debts delinquent debt to Treasury for offset proposed § 901.4. 

in an order of priority in accordance with the best interests of � Secretary shall exempt means-tested payments made under the 

the government from offset when requested; other payments may System. 

be exempted by Secretary under certain �(e) Describes requirements for administrative 

circumstances review as set forth in proposed § 901.3(a). 

� Benefit payment offsets governed by separate 

regulations 

� Post-offset notice by disbursing officials 

The Fund includes payments 

Federal Employee Retirement 

-5- November 22, 2000 
OBSOLETE FCCS PROPOSED FCCS FINAL FCCS 

901.3 Collection by administrative offset (cont.) 

� Debts paid in same order of priority based on 

best interests of Government 

� Secretary authorized to waive certain Computer 

Matching Act provisions upon proper agency 

certification 

� Secretary authorized to enter into reciprocal 

agreements with States to collect State debts by 

offset and vice versa 

� (d) Bankruptcy Code applies to bankruptcy cases 

102.4 Administrative offset against amounts payable from 901.4 Administrative offset against amounts payable from Deleted 

Civil Service Retirement and Disability Fund Civil Service Retirement and Disability Fund and the �Proposed § 901.4 has been merged into revised 

� (a) Agencies may request offset by Office of Personnel Federal Employee Retirement System § 901.3 of the final rule since the procedure 

Management (OPM) for former Federal employees receiving � (a) Adds reference to Federal Employee Retirement described in proposed § 901.4 is a form of nonretirement or disability payments System (FERS); applies only to debts not collected centralized administrative offset. 

� (b) Agencies must certify that debt is due and agency has through Treasury Offset Program (salary offset expected 

complied with salary offset requirements to merge with administrative and tax refund offset by 

� (c) Describes procedures for maintaining debt information 1998); may still request directly to OPM in certain cases 

for debtors expected to receive payments in the future � (b) & (c) Describes procedures for maintaining debt 

� (d) Offset requests should be terminated if debt is paid information for debtors expected to receive payments in 

� (e) OPM not authorized to review merits of claim the future 

� (d) OPM not authorized to review merits of claim 

� (e) Bankruptcy Code applies to bankruptcy cases 

102.5 Use of consumer reporting agencies 901.5 Reporting claims 901.4 Reporting claims 

� (a) Agencies must develop procedures for reporting � (a) Agencies must develop procedures for reporting all � Adopts proposed § 901.5. 

consumer debt to credit bureaus debts to credit bureaus; adds that agencies may report 

� (b) Procedures must comply with Privacy Act current claims; adds requirement that procedures also 

� (c) Procedures must be consistent with 31 USC 3711(f) must comply with Bankruptcy Code; procedures for 

requirements reporting consumer claims must be consistent with 31 USC 

3711(e) [formerly 3711(f)] requirements; agencies need not 

duplicate due process steps already provided to debtor; 

delinquent claims should be reported to CAIVRS 

-6- November 22, 2000 
OBSOLETE FCCS PROPOSED FCCS FINAL FCCS 

102.6 Contracting for collection services 901.6 Contracting for debt collection agencies and to 901.5 Contracting with private collection 

� (a) Procedures for contracting for collection services locate and recover unclaimed assets contractors and with entities that locate and 

� (b) Funding of collection services may be fixed-fee or � (a) Procedures for contracting for collection services recover unclaimed assets 

contingency fee; all collections must be deposited to � (b) Requirement that agencies use government-wide � Adopts proposed § 901.6. 

miscellaneous receipts debt collection contracts � (b) Revised to clarify that Federal agencies may 

� (c) & (d) Funding of collection services may be fixed­ refer debts to private collection contractors 

fee or contingency fee; deletes requirement that all pursuant to a contract between the agency and the 

collections must be deposited to miscellaneous receipts private collection contractor only if such debts are 

(since this is not always required) not subject to the DCIA requirement to transfer 

� (e) Adds DCIA provision that agencies may enter into debts to Treasury for debt collection services, e.g., 

contracts to located unclaimed assets debts are less than 180 days delinquent; Agencies 

also may refer debts to a private collection 

contractor listed on FMS’ schedule of private 

collection contractors in accordance with FMS 

procedures. 

� (c) Merges proposed §§ 901.6(c) and (d). 

� (d) Same as proposed § 901.6(e) 

� (e) Adds provision to clarify that agencies are 

authorized to contract for debtor asset and income 

search reports; fees may be paid from amounts 

collected, unless otherwise prohibited by law. 

102.7 Personal interview with debtor Deleted 

� Required personal interview with debtor when feasible 

102.8 Contact with debtor’s employing agency Deleted 

� Required contact with employing agency of Federal 

employee to arrange repayment by allotment 

102.9 Suspension or revocation of license or eligibility 901.7 Suspension or revocation of eligibility for loans and 901.6 Suspension or revocation of eligibility for 

� Recommends that agencies establish procedures for loan guaranties, licenses, permits or privileges loans and loan guaranties, licenses, permits or 

suspending or revoking licenses or other privileges to � (a) Adds DCIA requirement that bars agencies from privileges 

delinquent debtors; suspending or disqualifying entities that extending financial assistance in the form of loans or � Adopts proposed § 901.7. 

are delinquent debtors from doing business with the insurance to delinquent debtors 

Government; sureties that fail to comply with obligations � (b) Same recommendation as 102.9 for suspension or 

should be reported to Treasury for revocation action revocation of licenses & privileges for non-bankruptcy 

cases; adds reference to permits 

� (c) Extend such suspension or revocation to Federal 

programs administered by States 

� (d) Consider impact of Bankruptcy Code in bankruptcy 

cases 

-7- November 22, 2000 
OBSOLETE FCCS PROPOSED FCCS FINAL FCCS 

102.10 Liquidation of collateral 901.8 Liquidation of collateral 901.7 Liquidation of collateral 

� Allows liquidation of collateral for delinquent debts unless � (a) Reworded � Adopts proposed § 901.8. 

not cost-effective � (b) Consider impact of Bankruptcy Code in bankruptcy 

cases 

102.11 Collection in installments 901.9 Collection in installments 901.8 Collection in installments 

� (a) Lump sum payment preferred, but installment payments � (a) & (b) Same requirements as 102.11(a), except � Adopts proposed § 901.9. 

may be considered; agencies should obtain financial recommended minimum monthly payment & confessstatements, written agreement that accelerates debt in the judgment requirements deleted 

event of default; installment payments should be based on � (c) Security for payments should be obtained whenever 

size of debt, ability to pay, pay claim within 3 years, not be possible; agencies may accept installment payments if 

less than $50/month except in hardship cases, should have debtor refuses to enter into written agreement or provide 

confess-judgment security 

� (b) Debtor may designate how payments should be applied � Delete provision that describes how payments should 

be applied among multiple debts 

102.12 Exploration of compromise Deleted 

� Allows agencies to attempt compromise � Part 902 discusses compromise requirements 

102.13 Interest, penalties, and administrative costs 901.10 Interest, penalties, and administrative costs 901.9 Interest, penalties, and administrative costs 

� (a) Requires assessment of interest, penalties and � (a) Same requirements � Adopts proposed § 901.10. 

administrative costs in accordance with 31 USC 3717; requires � (b) Interest accrues from date of delinquency (which 

prior notice to debtor may be the date of the notice depending upon underlying 

� (b) & (c) Interest accrues from date of notice at rate required agreement, agency statutes and/or regulations) 

under 3717 � (c) Assessment of administrative costs requirement 

� (d) Requires assessment of administrative costs unchanged 

� (e) Requires assessment of penalties for debts delinquent � (d) Assessment of penalties requirement unchanged 

90+ days; to accrue from date of delinquency � (e) Adds DCIA authority to adjust administrative claims 

� (f) Payments applied first to penalty & costs, then to by COLA 

interest and finally to principal � (f) Same payment application priority 

� (g) & (h) Procedures for waiving or suspending assessment � (g) & (h) Agencies required to identify circumstances 

of interest, penalties and administrative costs by regulation when waiver is appropriate 

� (i) This provision does not apply to debts owed by States � (i) Deleted exceptions; added that agencies authorized 

or local governments, debts under contracts prior to 10/25/82, to apply common law; DCIA added provision that 3717 

when another statute or regulation applies, Social Security, now applies to claims owed by State & local Governments 

IRC or tariff debts; agencies authorized to apply common law (Social Security, IRC or tariff debts still excluded) 

or other applicable authority 

102.14 Analysis of costs 901.11 Analysis of costs 901.10 Analysis of costs 

� Requires periodic cost-benefit analysis of collection � Reworded � Adopts proposed § 901.11. 

program 

-8- November 22, 2000 
OBSOLETE FCCS PROPOSED FCCS FINAL FCCS 

102.15 Documentation of administrative collection action Deleted 

� Requires documentation of collection activity � Unnecessary language 

102.16 Automation Deleted 

� Requires agencies to automate debt collection activity � Unnecessary language 

102.17 Prevention of overpayments, delinquencies, and Deleted 

defaults � Unnecessary language 

� Requires agencies to manage credit & other programs to 

prevent debts & defaults 

102.18 Use and disclosure of mailing addresses 901.12 Use and disclosure of mailing addresses 901.11 Use and disclosure of mailing addresses 

� (a) Agencies may contact IRS to obtain debtors’ mailing � (a) & (b) Reworded � Adopts proposed § 901.12. 

addresses � (c) deleted; unnecessary language 

� (b) Mailing address information may be disclosed to agents 

to facilitate collection or compromise of debts; may only be 

disclosed to credit bureaus to obtain commercial credit report 

� (c) Requires compliance with IRS safeguarding procedures 

102.19 Exemptions 901.13 Exemptions 901.12 Exemptions 

� (a) Under the Debt Collection Act of 1982, administrative � (a) Modified to reflect DCIA authority to offset Social � Adopts proposed § 901.13. 

offset, credit bureau reporting, collection services contracting, Security benefits, subject to $9,000 exemption 

& assessment of charges requirements do not apply to IRC � (b) Unchanged 

debts or payments, Social Security debts or payments or tariff 

debts or payments; other laws (statutory or common law) may 

authorize the use of such procedures 

� (b) The exceptions do not mean to exclude employees 

administering the laws giving rise to the excepted debts 

and/or payments 

102.20 Additional administrative collection action Deleted 

� FCCS do not preclude use of other administrative collection � Included in 900.1 

remedies 

-9- November 22, 2000 
OBSOLETE FCCS PROPOSED FCCS FINAL FCCS 

PART 103 - STANDARDS FOR COMPROMISE OF PART 902 - STANDARDS FOR THE COMPROMISE PART 902 - STANDARDS FOR THE 

CLAIMS OF CLAIMS COMPROMISE OF CLAIMS 

103.1 Scope and application 902.1 Scope and application 902.1 Scope and application 

� (a) Agencies authorized to compromise claims not � (a) Agencies authority increased to $100,000, or such �Adopts proposed rule. 

exceeding $20,000 (exclusive of interest, penalties & other higher amount as Attorney General may determine; GAO’s 

charges); claims may be referred to GAO, or DOJ for litigation; debt collection role eliminated; clarifies that FCCS applies 

compromise authority for claims over $20,000 rests only with to agencies collecting their own debt or debt referred for 

DOJ; only GAO may compromise claims arising in the account debt collection services (cross-servicing) 

of an accountable officer prior to litigation; agency heads may � (b) Revisions to procedures for referring claims over 

delegate compromise authority $100,000 for compromise to conform with current practices 

� (b) Procedure for referring claims over $20,000 for 

compromise; DOJ sole compromise authority for such claims; 

agency should make recommendation 

103.2 Inability to pay 902.2 Bases for compromise 902.2 Bases for compromise 

� (a) & (b) Prescribes factors to consider when determining � (a) - (g) Consolidated “Inability to pay,” “Litigative �Adopts proposed rule. 

debtors’ ability to pay for compromise purposes probabilities,” and “Cost of collecting claim” �(g) Amended to clarify that, when evaluating a 

� (c) Agencies should consider recovery potential & compromise proposal, agencies need not obtain a 

exemptions available to debtor current financial statement from a debtor to assess 

� (d) Compromise payable in installments is discouraged; the merits of a proposal unless the proposal is 

written agreement should provide for acceleration and based on the debtor’s inability to pay. 

reinstatement of original debt, as well as security 

� (e) Agencies should have financial information to evaluate 

potential compromises 

103.3 Litigative probabilities Deleted 

� Consideration of litigation costs and Government’s ability � Included in 902.2 

to prove case when evaluating potential compromises 

103.4 Cost of collecting claim Deleted 

� Cost-benefit vs. enforcement policy considerations should � Included in 902.2 

be weighed when evaluating potential compromises 

103.5 Enforcement policy 902.3 Enforcement policy 902.3 Enforcement policy 

� Statutory enforcement policy considerations such as � Reworded �Adopts proposed rule. 

deterrence, securing compliance and severity of violation 

should be weighed when evaluating potential compromises of 

penalties, forfeitures and fines 

-10- November 22, 2000 
OBSOLETE FCCS PROPOSED FCCS FINAL FCCS 

103.6 Joint and several liability 902.4 Joint and several liability 902.4 Joint and several liability 

� Collection action should be pursued against all liable � Reworded in paragraphs (a) & (b) �Adopts proposed rule. 

parties simultaneously; compromise with one debtor should 

not release liability of co-debtors or set precedence 

103.7 Compromise for a combination of reasons Deleted 

� Authorizes compromise based on multiple reasons � Unnecessary language 

103.8 Further review of compromise offers 902.5 Further review of compromise offers 902.5 Further review of compromise offers 

� Agencies may seek assistance from GAO or DOJ in � GAO role eliminated; firm written substantive �Adopts proposed rule. 

evaluating offers to compromise compromise offer required before referral to DOJ 

103.9 Restrictions 902.6 Consideration of tax consequences to the 902.6 Consideration of tax consequences to the 

� Acceptance of debtor’s profits or stocks not authorized for Government Government 

a compromise; agencies should consider requiring a waiver of � Deleted restriction on acceptance of debtor’s profits or �Adopts proposed rule. 

tax-loss-carry-forward and tax-loss-carry-back rights of debtor stocks �Adds reference to new § 903.5, Discharge of 

indebtedness; reporting requirements. 

902.7 Mutual releases of the debtor and the Government 902.7 Mutual releases of the debtor and the 

� New section requiring that compromises be Government 

implemented by means of mutual release, when �Adopts proposed rule. 

appropriate �Revised to emphasize the mutuality of the debtor 

and Government releases and to clarify that debtor 

is deemed to waived claims even when release is 

not executed. 

PART 104 - STANDARDS FOR SUSPENDING OR PART 903 - STANDARDS FOR SUSPENDING OR PART 903 - STANDARDS FOR SUSPENDING 

TERMINATING COLLECTION ACTION TERMINATING COLLECTION ACTIVITY OR TERMINATING COLLECTION ACTIVITY 

104.1 Scope and application 903.1 Scope and application 903.1 Scope and application 

� (a) Agencies authorized to suspend or terminate collection � (a) Agencies’ authority increased to $100,000, or such �Adopts proposed rule. 

action with respect to claims not exceeding $20,000 (exclusive higher amount as Attorney General may determine; GAO’s 

of interest, penalties & other charges); claims may be referred debt collection role eliminated; clarifies that FCCS applies 

to GAO, or DOJ for litigation; collection activity for claims to agencies collecting their own debt or debt referred for 

over $20,000 may be suspended or terminated only by DOJ debt collection services (cross-servicing) 

� (b) Procedure for referring claims over $20,000 to DOJ; � (b) Revisions to procedures for referring claims over 

Agencies may terminate collection action when claim is $100,000 to DOJ 

erroneous or without legal merit 

-11- November 22, 2000 
OBSOLETE FCCS PROPOSED FCCS FINAL FCCS 

104.2 Suspension of collection activity 903.2 Suspension of collection activity 903.2 Suspension of collection activity 

� (a) & (b) Prescribes factors to consider when determining � (a)-(c) reworded to incorporate 104.2(a) & (b) �Adopts proposed rule. 

that collection action should be suspended, such as inability � (d) Consider impact of Bankruptcy Code in bankruptcy 

to locate the debtor and temporary inability to pay cases 

� (c) Prescribes when collection activity should be 

suspended pending waiver or administrative review 

104.3 Termination of collection activity 903.3 Termination of collection activity 903.3 Termination of collection activity 

� (a) - (e) Prescribes factors to consider when determining � (a) Reworded to combine factors in 104.3(a)-(e); adds �Adopts proposed rule. 

that collection action should be terminated, such as inability that collection activity may be terminated for debts that 

to collect or locate the debtor, cost to collect exceeds have been discharged in bankruptcy 

potential recovery, claim without merit or cannot be � (b) Adds that termination does not preclude retention of 

substantiated debt record for purposes of selling debt, pursuing 

collection at a later date, offset, or to screen for future 

creditworthiness 

� (c) Adds that bankruptcy filing generally requires that 

collection activity be terminated 

104.4 Transfer of claims 903.4 Exception to termination 903.4 Exception to termination 

� Allows referral to GAO for review of whether collection � Eliminates GAO role �Adopts proposed rule. 

activity should be suspended or terminated; agencies should � Removes reference to referral to DOJ; included in Part 

consider enforcement policies and refer claim for litigation 904 

even though termination may otherwise be appropriate; 

agencies to refer to DOJ claims on which agency hold a 

judgment by assignment unless agency has its own litigation 

authority 

-12- November 22, 2000 
OBSOLETE FCCS PROPOSED FCCS FINAL FCCS 

NEW 903.5 Discharge of indebtedness; reporting 

requirements 

�(a) Requires agencies to take all appropriate 

collection actions and make a determination that 

further collection action is not warranted before 

making a determination to discharge a debt (“close 

out”). 

termination/suspension of debt collection activity. 

�(b) Provides that agencies may not discharge a 

debt until the requirements of 31 U.S.C. 3711(I) (sale 

of debt) have been met. 

�(c) Provides that agencies must report discharge 

to IRS on Form 1099-C. Treasury and Treasurydesignated debt collection centers may file 1099-C 

on behalf of agencies. 

�(d) Agencies must request that litigation counsel 

release liens after discharge. 

Discusses difference between discharge and 

-13- November 22, 2000 
OBSOLETE FCCS PROPOSED FCCS FINAL FCCS 

PART 105 - REFERRALS TO DEPARTMENT OF PART 904 - REFERRALS TO THE DEPARTMENT OF PART 904 - REFERRALS TO THE 

JUSTICE OR GAO JUSTICE DEPARTMENT OF JUSTICE 

105.1 Prompt referral 904.1 Prompt referral 904.1 Prompt referral 

� (a) Procedures for referring claims that cannot be resolved � (a) Revised procedures for referring claims that cannot �Adopts proposed rule. 

under FCCS to DOJ for litigation be resolved under FCCS to DOJ for litigation reflect 

� (b) GAO must review claims arising from audit exceptions current practice; claims threshold over which claims are 

prior to DOJ referral referred to DC Civil Division increased from $100,000 to 

� (c) GAO may advise agency on doubtful claims prior to $1,000,000 

referral to DOJ � (b) GAO’s role eliminated; includes 105.1(d) 

� (d) Agencies should not have debtor contact after referral requirements that agencies refrain from debtor contact 

and should notify DOJ or GAO of any payments received after referral to DOJ; adds provision that DOJ shall notify 

agencies of any payments received from debtor 

105.2 Claims Collection Litigation Report 904.2 Claims Collection Litigation Report 904.2 Claims Collection Litigation Report 

� (a) Completion of CCLR required for DOJ referrals for � (a)-(c) Reworded CCLR requirements; deleted specifics �Adopts proposed rule. 

litigation; specifies information required re items required; refers agencies to CCLR instructions 

� (b) CCLR required for DOJ referrals for compromise, 

suspension or termination concurrence 

105.3 Preservation of evidence 904.3 Preservation of evidence 904.3 Preservation of evidence 

� Agencies required to preserve evidence for litigation � Adds requirement that certified copies of documents be �Adopts proposed rule. 

purposes forwarded to DOJ with litigation referral; requires agencies 

to send original documents upon request 

105.4 Minimum amount of referrals to Department of Justice 904.4 Minimum amount of referrals to Department of 904.4 Minimum amount of referrals to Department 

� Specifies that minimum amount of claim that can be referred Justice of Justice 

to DOJ for litigation is $600 (principal balance), unless � Increases minimum amount of claim to $2,500 (principal �Adopts proposed rule. 

significant enforcement policy warrants otherwise, or debtor balance); adds exception for claims being referred solely to 

refuses to pay valid debts despite having the clear ability to secure a judgment for lien filing purposes 

pay 

105.5 Preliminary referrals to GAO Deleted 

� Procedures for referral of claims to GAO � GAO’s role eliminated 

-14- November 22, 2000