POLICY STATEMENT: Preamble

SUMMARY

The TIN Policy Directive requires Federal payment certifying officials to include a valid

Taxpayer Identification Number (TIN) on all Federal payment vouchers certified to

Treasury for payment, except in specific limited circumstances.

BACKGROUND

Section 31001(d)(2) of the Debt Collection Improvement Act of 1996 (DCIA), codified

at 31 U.S.C. 3716 (c), requires Federal disbursing officials to offset an eligible payment

to a payee to satisfy a delinquent non-tax debt owed by the payee to the Government, a

process known as offset. Under regulations implementing this statute, a Federal

disbursing official should conduct such an offset when the name and Taxpayer

Identification Number (TIN) of a payee match the name and TIN of a delinquent debtor.

Section 31001(y) of the DCIA, codified at 31 U.S.C. 3325(d), requires agencies to

include the TIN of each payee on certified payment vouchers submitted to a

disbursing official. Providing TINs on payment vouchers is necessary to carry out offset

and vendor income reporting.

The Taxpayer Relief Act of 1997, enacted subsequent to the DCIA, included a provision

that provides for the continuous levy of Federal non-tax payments to collect delinquent

tax debts. Continuous levy will be implemented by the Financial Management Service

(FMS) through a process similar to that of offset, and, accordingly, TINs on payment

certifications are also required to implement this program.

Pursuant to 31 U.S.C. 3325(a), FMS is responsible for determining that payment

vouchers certified to Treasury are in the correct form. To ensure that agencies submit

payment vouchers in a proper form that includes TINs, FMS issued a Policy Statement

in the Federal Register on October 9, 1998, requiring agencies to prepare and submit

implementation reports to FMS documenting compliance with the TIN requirement and

identifying barriers to providing TINs.

FMS required these reports to determine compliance, evaluate the effectiveness of

proposed agency compliance strategies, identify barriers to TIN collection, determine if

any circumstances prohibited use of TINs on payment vouchers, and formulate guidance

to assist agencies in overcoming barriers impeding the collection and provision of TINs.

IMPLEMENTATION REPORT FINDINGS

A summary of these reports indicates a number of barriers that prevent agencies from

collecting or providing TINs and also identifies strategies, methods, and practices 

being used to improve the collection of this information.
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Barriers to Collecting TINs

The implementation reports indicate that legal barriers remain that prevent agencies

from collecting TINs. For example, the U.S. Marshals Service reported that

there were circumstances when court-ordered payments must be made, regardless of

whether it had received a TIN. There may be other circumstances when agencies lack the

statutory authority to require TINs from certain payment recipients.

Several agencies noted that certain payment recipients, such as foreign vendors, illegal

aliens, and other Government agencies, are unable to obtain a TIN. Agencies also reported

that collecting TINs for one-time payments, such as payments associated with the taking 

of the census, was economically prohibitive. Agencies also reported incidents when

payment recipients submitted an invalid or improper TIN.

Law enforcement agencies wrote that collecting TINs from payment recipients may have

a detrimental effect on Federal, State, or local law enforcement operations. There were

also circumstances when it was necessary for these agencies to pay an indigent fact

witness, without the submission of a TIN, in order to facilitate law enforcement.

Several agencies reported that certain vendors refused to submit their TINs, despite

repeated requests. Many vendors were unaware that they had TINs and therefore refused

to submit this information.

In addition to these barriers, several agencies felt that it was unnecessary to collect TINs

from recipients who were exempt from the Treasury Offset Program (TOP). Although

some payments are exempt from the TOP, these payments may not be exempt from levies

to collect tax debts. As a result, agencies should collect TINs for all payments.

Barriers to Providing TINs to FMS

Law enforcement agencies identified circumstances when providing TINs to FMS would

substantially harm their programs, such as providing TINs when paying undercover

agents or informants.

No Exceptions for Vendor Payments

In general, agencies were more successful in collecting TINs from individual payment

recipients than from Government vendors. FMS received several comments from

agencies citing a need for an exception in those circumstances when a vendor refused to

submit a TIN. A few agencies indicated that there are geographic regions so remote that

an agency had to do business with the vendor, even if the vendor refused to submit a TIN.

While exemptions are available in some circumstances for vendor payments, this Policy

Directive contains no specific exceptions for the collection of TINs from vendors as a

class of payments. It is important that Federal Government vendors be subject to TOP

since payments made to vendors represent the largest individual payments subject to
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offset and therefore the potential for a large-dollar collection by fully offsetting these

payments is greater.

Strategies for Collecting TINs

The implementation reports identified several strategies, practices, and methods that

may be useful in the collection of TINs from vendors and individual recipients.

Agencies reported that the greatest success in collecting TINs from vendors was achieved

during contract proceedings. Most agencies have developed internal policies and

procedures that require vendors to submit TINs as a condition of awarding the contract.

By establishing these policies and procedures, agencies can refuse to do business with

vendors who fail to submit a TIN. Such refusal will ensure that agencies comply with 31

U.S.C. 7701(c), which requires agencies to collect TINs from each person doing business

with that agency. It will also assist agencies in complying with 31 U.S.C. 3325 (d). The

Federal Acquisition Rule; Taxpayer Identification Numbers (FAR TIN) interim rule,

codified at 48 CFR Parts 1, 4, 13, 14, 15, and 52, provides agencies with contract clauses

that require vendors to submit TINs as part of the application process and impose

monetary penalties if such information is not supplied. These clauses are used by a small

number of agencies and have been effective in the collection of TINs for these agencies.

Several agencies have developed contract clauses in agency supplemental acquisition

rules, which specify that a proper invoice must include a valid TIN and electronic funds 

transfer (EFT) information. These clauses are used in support of the Prompt Payment rule 

at 5 CFR Part 1315, which requires EFT information and a TIN as part of a proper

invoice. In such cases, an invoice is rejected and returned to a vendor if the vendor fails

to submit this information and it was required to do so in the contract.

Agencies are also taking measures to inform vendors and individuals of the Federal

Government’s efforts and requirements to collect TINs from payment recipients.

Agencies are making this information available by submitting letters to recipients,

posting information on the Internet, and establishing points of contact with vendors.

There were a number of agencies that planned to meet personally with vendors to convey

the Government’s TIN and EFT requirements.

Certifying officials may forward TINs to the Internal Revenue Service (IRS) in order to

validate the TIN with the IRS taxpayer record information. IRS currently has software

available that allows it to identify an invalid TIN by matching a payee TIN with its

taxpayer records. The implementation reports revealed that agencies were, in certain

circumstances, receiving invalid TINs from payment recipients. In many cases, agencies

were unaware that a TIN was invalid until it was submitted to FMS and sent through the

TOP.
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SECTION-BY-SECTION ANALYSIS

Policy

The Policy Directive explains that FMS will require payment vouchers to have TINs,

except in specific limited circumstances described below.

Exceptions

To ensure that agencies submit payment vouchers in a proper form, FMS is requiring that

Federal payment vouchers submitted to Treasury include a valid TIN. FMS will not

require a TIN on payment vouchers under the following circumstances:

a) Where an agency does not have the statutory or legal authority to require a

Federal payee to submit a Taxpayer Identification Number and the agency has

no other reasonable means of obtaining it;

Several agencies noted that certain court-ordered payments must be made,

regardless of whether the paying agency had received a TIN. There may

be other circumstances when agencies lack the legal or statutory authority

to require TINs from certain payment recipients.

b) Where a Federal payment recipient is unable to obtain a Taxpayer Identification

Number;

Agencies commented that certain payment recipients are incapable of

obtaining TINs. For example, agencies noted that foreign companies,

foreign visitors, and U.S. Government agencies are unable to obtain a TIN

and would therefore be unable to supply a TIN on a payment request.

c) Where the collection or provision of a Taxpayer Identification Number has a

detrimental effect on a law enforcement operation, a military operation,

national security, or emergency relief efforts;

Law enforcement agencies indicated the need, in certain circumstances, to

protect the identity of certain individuals, such as the case for payments to

the witness protection program, for undercover operations, or to

informants. Law enforcement agencies may also have the need to pay an

indigent fact witness to facilitate law enforcement.

FMS recognizes that payments for military operations, natural disasters,

and emergencies must be made as soon as possible and therefore do not

require the collection of TINs by an agency when the collection of such

information could delay the payment process and endanger life or

property.
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d) Where the agency does not expect to make more than one payment, in an

amount of $200 or less, to the same recipient within a one-year period (i.e.,

the payment is non-recurring) and the cost of obtaining a TIN would be

prohibitive; or

Several agencies noted that collecting TINs for one-time, small-dollar

payments, such as refunds for overpayments, is economically prohibitive. 

FMS recognizes that it is not practicable to collect TINs when an agency

is making non-recurring, small-dollar payments and has accordingly

established a de minimus amount of $200, under which amount an

exception would exist.

e) Where FMS determines that the collection or provision of a TIN is not in 

the best interest of the Government.

FMS reserves the right to provide exceptions, in addition to exceptions (a)

through (d) of this Policy Directive, in circumstances where it determines

that the collection or provision of a TIN cannot be performed due to a

legitimate barrier.

FOR MORE INFORMATION

Contact Michael Dressler, Senior Financial Program Specialist, at (202) 874-7082; 

Catherine McHugh, Policy Team Leader, at (202) 874-7497; or Stephen Vajs, Director,

Risk Management Division, at (202) 874-1229.

All published rules, notices, and bulletins may be accessed via the Internet at

http://www.fms.treas.gov/debt/top.html.
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POLICY

The Financial Management Service (FMS), as the disbursing official for the Department

of the Treasury (Treasury), is responsible for determining that Federal payment vouchers

certified to Treasury are in a correct form. As directed by 31 USC 3325(b) and Treasury

instructions for payment certification, FMS requires that all Federal payment vouchers

submitted to Treasury include a valid Taxpayer Identification Number (TIN), except as

described below.

AUTHORITY

Statutes: 31 U.S.C. 3325(a)

SCOPE

This Policy Directive applies to all Federal payment vouchers certified to Treasury for

payment.

DEFINITIONS

Payment Voucher:

Amounts certified for payment by the Electronic Certification System (ECS), on the

Standard Form 1166, or through other appropriate means.

Taxpayer Identification Number:

A nine-digit Employer Identifying Number or Social Security number as defined in

Section 6109 of the Internal Revenue Code of 1986 (26 U.S.C. 6109).

EXCEPTIONS

FMS will not require TINs on payment vouchers under the following circumstances:

a) Where an agency does not have the statutory or legal authority to require a Federal

payee to submit a Taxpayer Identification Number and the agency has no other

reasonable means of obtaining it;
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b) Where a Federal payment recipient is unable to obtain a Taxpayer Identification

Number;

c) Where the collection or provision of a Taxpayer Identification Number has a

detrimental effect on a law enforcement operation, a military operation, national

security, or emergency relief efforts;

d) Where the agency does not expect to make more than one payment, in an amount of

$200 or under, to the same recipient within a one-year period (i.e., the payment is

non-recurring) and the cost of obtaining the Taxpayer Identification Number is

prohibitive; or

e) Where the FMS determines that the collection or provision of a TIN is not in the best

interest of the Government.