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OVERVIEW OF THE CENTRALIZED OFFSET OF PAYMENTS 

REPRESENTING REIMBURSEMENT OF ATTORNEY’S FEES AND 

COSTS UNDER THE EQUAL ACCESS TO JUSTICE ACT 

Summary

On June 14, 2010, the Supreme Court unanimously held in Astrue v. Ratliff, 130 S. 

Ct. 2521 (2010), that the term, “prevailing party,” as used in the Equal Access to 

Justice Act (EAJA), is a “term of art” that refers to the prevailing litigant, and not 

his/her attorney. Thus, the EAJA award in the Ratliff case belonged to the social 

security claimant and not her attorney. As a result, the Court held that the 

Department of the Treasury was entitled to offset the EAJA award to reimburse the 

federal government for a pre-existing debt owed to the government by the 

claimant. The following guidance explains how the Treasury Offset Program 

works in connection with awards of attorney’s fees under the EAJA and provides 

guidance for accepting third-party agreements allowing the Department of the 

Treasury to pay these fees directly to claimants’ attorneys.

The Bureau of the Fiscal Service1

The Bureau of the Fiscal Service (Fiscal Service), a bureau of the U.S. Department 

of the Treasury, in its role as the U.S. Government’s money manager, serves as the 

disbursing office for the executive branch of the Federal Government (excluding 

Department of Defense payments). Fiscal Service disburses more than $2.1 trillion 

in federal payments annually to more than 100 million payees.2

 Fiscal Service also 

operates the Treasury Offset Program (TOP) to collect delinquent federal and state 

debts by reducing payments made to delinquent debtors. 

1

Effective October 7, 2012, Financial Management Service merged with the Bureau of the 

Public Debt to form the Bureau of the Fiscal Service. 

2

See http://fms.treas.gov/aboutfms/index.html#payments. 
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Relevant Legal Authorities 

TOP carries out collection authorities set forth in several statutes and regulations.3 

The authority to offset reimbursement of fees and costs obtained pursuant to the 

Equal Access to Justice Act (EAJA),4

 is set forth in 31 U.S.C. § 3716 and the 

regulations found in 31 CFR 285.1 (Collection of past-due support by 

administrative offset), 31 CFR § 285.5 (Centralized offset of Federal payments to 

collect nontax debts owed to the United States), and 31 CFR § 285.6 

(Administrative offset under reciprocal agreements with states). 

Treasury Offset Program Operations

TOP is a fully automated system that works as follows: Agencies to which debts 

are owed (referred to as “creditor agencies”) submit information about delinquent 

debts to TOP. Federal agencies are required to submit information regarding debts 

to TOP, but state agencies do so voluntarily. TOP maintains the information in its 

delinquent debt database. On the payment side, payment agencies prepare and 

certify payment vouchers to federal disbursing officials (including those at Fiscal 

Service, the Department of Defense, the U.S. Postal Service and other Federal 

entities),5

 who then disburse payments.6 The payment voucher contains 

information about the payment, including the name and taxpayer identifying 

number (TIN) of the person entitled to receive payment. At the time Fiscal Service 

disburses payments,7

 TOP compares the payment information with debtor 

information in the TOP database. If a payee's name and TIN match the name and 

TIN associated with a debt, TOP offsets that payment, in whole or in part, to 

satisfy the debt. TOP then transmits amounts collected to the appropriate creditor 

agencies. 

Creditor agencies can update information in TOP every day of the week, around 

the clock. Updates include adding a new debt; deactivating a debt that is no longer 

3

See 5 U.S.C. § 5514; 26 U.S.C. § 6331(h), 26 U.S.C. § 6402; 31 U.S.C. § 3716; 31 U.S.C. § 

3720A; and implementing regulations at 31 CFR Part 285, Subpart A. 

4

The EAJA is codified in pertinent part at 28 U.S.C. § 2412. 

5

31 U.S.C. § 3716(c)(1)(A). 

6

Id.

7 Disbursing offices other than Fiscal Service (referred to as “non-Treasury disbursing offices” or 

“NTDOs”) provide payment data to TOP prior to disbursement. TOP then matches the 

information with the delinquent debt database and sends information about matches back to the 

NTDO so that the disbursing official can conduct the offset and send collections back through 

TOP. 
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legally enforceable (e.g., subject to a stay in bankruptcy); closing a debt that has 

been paid or otherwise resolved; changing balances to reflect payments received 

outside TOP, accrued interest and penalties, and other adjustments; or correcting or 

updating any other information associated with the debt (e.g., debtor name, TIN, 

address, etc.). Because TOP can be updated at almost any moment, any 

information obtained from TOP regarding the existence, legal enforceability, or 

balance of a debt is only accurate as of the time that the inquiry is made. As a 

consequence, it is imperative that the government be able to determine the 

existence of a debt that may be subject to offset as close to the date of 

disbursement as possible. In the situation where the disbursement involves 

attorney’s fees, for example, checking for debts when the plaintiff files a petition 

for an award of fees, before the government responds to the petition, or at any time 

before the court issues its order, generally will be premature, because any debt 

incurred by the plaintiff before a payment is disbursed is subject to offset.8 

Disclosure of TOP Information

Legal Authorities. TOP information is protected from unauthorized disclosure 

pursuant to applicable federal laws, including the Privacy Act of 1974.9Fiscal 

Service has published a “systems of records” notice (SORN) covering the data in 

TOP.10 The Privacy Act permits disclosure of information in several instances. 

The authorities relevant to disclosing EAJA offset information are: (a) if the 

individual requests it for him or herself; (b) if the individual provides written 

authorization for disclosure to a third party; (c) or if disclosure is authorized by a 

routine use published in the SORN. 

 

8 As the Supreme Court acknowledged in Astrue v. Ratliff, 130 S. Ct. 2521, 2529 (2010), 

Treasury modified TOP in 2005 to offset “miscellaneous” payments, such as attorney’s fees 

awards. In response, the government decided to continue direct payments to attorneys only in

cases where “the plaintiff does not owe a debt to the government and assigns the right to receive 

the fees to the attorney.” Id. (citation omitted). The Court further held that “nothing about the 

Government’s past payment practices altered the statutory text that governs this case.” Id. As a 

consequence, a court should not require the government to waive this right by ordering it to 

honor an agreement between the plaintiff and attorney regarding the payment of attorney’s fees 

before the court approves or authorizes these fees.

9

Information about tax debts and offset of federal tax refunds to collect other debts is also 

protected by 26 U.S.C. § 6103; however, section 6103 does not apply to offset of EAJA 

reimbursement payments, as TOP does not reduce them to collect federal tax debts.

10 Treasury/FMS .014--Debt Collection Operations System. See 77 Fed. Reg. 8947 (2012).
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Methods of Obtaining Information. TOP has established procedures for obtaining 

information from its database, which depend upon the requestor and, to some 

extent, the justification for permitting disclosure. 

(a) Individual Request. An individual can request information about his or

her own nontax debts by either sending a written request to Fiscal Service or by 

calling the TOP IVR at 800-304-3107. In either case, TOP will disclose the 

existence of the debt, the creditor agency name and contact information for the 

creditor agency. TOP does not disclose balances, because creditor agencies may 

have different balances in their system that they have not yet submitted to TOP,11

and the balance may be updated with interest and administrative charges prior to 

the date the payment is disbursed. 

(b) Authorized Third Party. An individual may authorize Fiscal Service to

disclose information about his or her debts to any third party by providing such 

authorization to Fiscal Service in writing. Fiscal Service developed the Form 13, 

available on Fiscal Service’s public web site, to provide a quick way to ensure 

Privacy Act compliance. Per the instructions on the form, once it is received by 

facsimile or mail, Fiscal Service will make disclosures to the party identified on 

the form.12 Fiscal Service will also review other written authorizations, such as 

debtor letters and powers of attorney, to determine if they are sufficient to 

authorize disclosure. 

(c) Federal Agency Involved in Litigation or Administrative Proceeding.

Fiscal Service may disclose information to the Department of Justice or another 

federal agency when requested in connection with a legal proceeding, or to obtain 

concurrence in a decision to compromise, suspend, or terminate collection action 

on a debt.13 Such disclosure must be consistent with the purpose for which the data 

was collected, which is to collect the debt, including actions related to debt 

collection such as defending the United States in court. 

Guidance for Accepting Agreements To Pay Third Parties. In instances where a 

payee has agreed to have payment made directly to a third party (like the payee’s 

11 TOP can only collect the balance that the creditor agency indicated in its last records update. 

If, after TOP collects the entire balance in the system, the creditor agency discovers it has not 

collected enough, it must re-submit the debt. Conversely, if it has collected too much, the 

creditor agency is responsible for refunding the over-collection directly to the debtor. 

12 Fiscal Service will only disclose the existence of a nontax debt, due to restrictions in 26 U.S.C.

§ 6103, and because EAJA payments may not be offset to collect tax debts through TOP.

13 Routine use 6 in the SORN. 
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attorney),14to protect the government’s interest in collecting a debt the payee owes 

to the government, the federal agency responsible for payment should determine 

that no debt exists prior to honoring the agreement to pay the third party. One 

method for doing so would be for the payee to sign a Form 13 authorizing 

the federal agency to call the TOP IVR. Because the Form 13 permits the 

authorized person to obtain any information the individual could obtain, the 

IVR would disclose information about the creditor agency and any offsets that 

have occurred to date. However, as previously indicated, the IVR will not 

disclose balances. 

The federal agency also may rely on the routine use for legal proceedings by 

providing written notice to Fiscal Service representing that it meets the description 

of the routine use. However, because the debt balance, delinquency date, creditor 

agency, and other information is not necessary for collecting the debt through 

offset, requests for such information (as opposed to the mere existence of an 

outstanding debt) will generally be denied pursuant to the Privacy Act. An agency 

may make a written case for why additional information regarding the debt at issue 

should be disclosed under the Privacy Act, and Fiscal Service’s Office of Chief 

Counsel will review the request to see if such additional disclosure is permissible. 

Whichever method is chosen, such inquiry, as explained, should be performed as 

close in time to the issuing of a payment as is practicable, in order to protect the 

United States’ interest in collecting the debt. In addition, if the individual has 

managed to resolve the debt or otherwise provide reasons for its inactivation, 

making such inquiries as late as possible enables the TOP system to provide 

indications that a third-party payment agreement would be acceptable to the United 

States. 

14 In the attorney’s fees context, courts often refer to such a payment arrangement as an 

“assignment” by the client of the right to the fee award. See, e.g., Ratliff, 130 S. Ct. at 2529; 

Mathews-Sheets v. Astrue, 653 F.3d 560, 565 (7th Cir. 2011). But, to be valid, the “transfer” or 

“assignment” of claims against the United States, including the assignment of an attorney’s fees 

award, must meet the requirements of the Anti-Assignment Act, 31 U.S.C. § 3727. If the 

requirements of the Anti-Assignment Act are not satisfied, the assignment of attorney’s fees, as a 

practical matter, is not valid unless the government waives the Anti-Assignment Act and agrees 

to accept the assignment.
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As the disbursing office, Fiscal Service performs an essentially ministerial task by 

paying the person the paying agency directs it to pay. However, because the 

amount of debt is not disclosed to the paying agency, the paying agency cannot 

direct Fiscal Service how to split the funds if there is debt. Additionally, there 

currently is no operational mechanism for an attorney who has a contractual 

arrangement with a claimant regarding payment of his or her EAJA fees to be paid 

the remainder of an EAJA payment after it has been offset due to debt. It should 

be noted, therefore, that debt balances will not be disclosed for the purpose of 

having a split disbursement to both the attorney and the claimant. 

For questions, you may contact Debt Management Services is 202-874-6810.