46428 Federal Register / Vol. 62, No. 169 / Tuesday, September 2, 1997 / Proposed Rules

DEPARTMENT OF THE TREASURY

Fiscal Service

31 CFR Part 212

RIN 1510–AA61

Taxpayer Identifying Number

Requirement

AGENCY: Financial Management Service,

Fiscal Service, Treasury.

ACTION: Notice of proposed rulemaking.

SUMMARY: The Debt Collection

Improvement Act of 1996 (DCIA)

requires that executive agencies include

the taxpayer identifying number (TIN)

of each person to whom payment may

be made with each payment request

submitted to a disbursing official on a

certified voucher. Effective six months

after the date of publication of the final

rule, all disbursing officials will be

required to reject any executive agency

payment request that does not include

the TIN. This requirement will ensure

that TINs of Federal payment recipients

are available to facilitate debt collection

by offset of Federal payments under the

DCIA, and for vendor income reporting

to the Internal Revenue Service (IRS) as

mandated by the Internal Revenue Code

of 1986 (IRC).

DATES: Comments must be received by

November 3, 1997.

ADDRESSES: Comments should be sent to

Carolyn M. Austin-Diggs, Director, Asset

Management Policy and Planning

Division, Financial Management

Service, U.S. Department of the

Treasury, Room 414, 401 14th Street

S.W., Washington, DC 20227.

FOR FURTHER INFORMATION CONTACT:

Dean Balamaci (Director, Program

Implementation) at 202–874–6670,

Barbara Wiss (Program Specialist) at

202–874–7491, Catherine McHugh

(Policy Specialist) at 202–874–7497, or

Laurie Levin (Attorney-Advisor) at 202–

874–8615. This document is available

on the Internet home page of the

Financial Management Service: http://

www.fms.treas.gov.

SUPPLEMENTARY INFORMATION:

Background

On April 26, 1996, the DCIA was

enacted as Chapter 10 of the Omnibus

Consolidated Rescissions and

Appropriations Act of 1996, Public Law

104–134, 110 Stat. 1321–358. A major

purpose of the DCIA is to enhance the

government-wide collection of

delinquent debts owed to the Federal

Government. Among other things, under

the DCIA, an eligible Federal payment

will be reduced or withheld to pay the

recipient’s delinquent debt owed to the

United States. This process, known as

‘‘offset,’’ also may be used to collect

delinquent debts owed to States,

including past-due child support.

The Financial Management Service

(FMS) is responsible for the

implementation of centralized

administrative offset of Federal

payments for the collection of

delinquent nontax debt in accordance

with the provisions of the DCIA. In

addition, FMS, as the Treasury

disbursing agency, is responsible for the

disbursement of public money for the

executive branch. 31 U.S.C. 3321.

Section 31001(y) of the DCIA,

codified at 31 U.S.C. 3325(d), requires

that the head of an executive agency

include with each certified voucher

submitted to a disbursing official

pursuant to 31 U.S.C. 3325(a) the TIN of

each person to whom payment may be

made under the voucher. To ensure that

agencies comply with this DCIA

provision, which was effective April 26,

1996, FMS is issuing this proposed rule.

Federal agencies are advised that

effective six months after the date of

publication of the final rule, all

disbursing officials will reject any

executive agency payment request that

does not include the TIN of the

person(s) to whom payment may be

made, i.e., the payee(s). For purposes of

this proposed rule, ‘‘person’’ does not

include a Federal agency.

Payments made by the legislative and

judicial branches of the Federal

Government will be included in the

offset program, but those payments are

not made by the executive branch and

therefore are not covered by this

regulation. We encourage the legislative

and judicial disbursing officers to

include the TINs in their payment

function, as it is one of the means to

accomplish the administrative offset of

payments to pay delinquent debts.

The 9-digit TIN is an identifier

required of all individuals and

businesses that file tax returns in the

United States, as described in section

6109 of the IRC (26 U.S.C. 6109). For

purposes of this proposed rule, taxpayer

identification number has the same

meaning as taxpayer identifying

number. For individuals who are

eligible for a social security number

(SSN), the SSN assigned by the Social

Security Administration serves as the

TIN. For resident or nonresident aliens

ineligible for an SSN, the individual

taxpayer identification number (ITIN)

assigned by the IRS serves as the TIN.

For entities other than individuals, the

employer identification number (EIN)

assigned by the IRS serves as the TIN.

Where a payment certifying agency

determines that an individual or entity

does not have a TIN and is not required

to have a TIN under any law other than

the DCIA certified payment voucher

requirement, payment requests lacking

TINs will not be rejected.

The intent of this proposed rule is to

ensure that TINs are included on a

certified voucher, as required by 31

U.S.C. 3325(d). The TIN is necessary for

the collection of delinquent debt owed

to Federal agencies and States by

administrative offset under the

provisions of the DCIA. The TIN is a

critical identifier for matching payment

requests with delinquent nontax debtor

information for offset purposes. When a

match occurs, the amount offset from

the payment will be applied to the

payee’s delinquent debt, to the extent

legally allowed. In addition, Federal

agencies need the TIN to comply with

vendor income reporting requirements

under the Internal Revenue Code.

Interagency efforts are under way to

identify ways to assist Federal agencies

in verifying the accuracy of TIN

information provided by a payee. These

efforts do not preclude agencies from

complying with the DCIA.

Agencies have been required to

furnish the TINs of payment recipients

on all certified vouchers submitted to

disbursing officials since April 26, 1996,

the effective date of the DCIA. In its

interim rule creating 31 CFR Part 208,

Management of Federal Agency

Disbursements, FMS advised agencies of

this DCIA requirement. See 61 FR

39254, July 26, 1996. Prior to the

enactment of the DCIA, FMS issued

Treasury Financial Management

Bulletin No. 95–10 on August 18, 1995

(TFM Bulletin), which required that the

payee’s TIN be included on all certified

vouchers for vendor, miscellaneous, and

salary payments. The TFM Bulletin

requirement applied to all forms of

payment requests submitted to FMS’

Regional Financial Centers. In addition,

the TFM Bulletin required that other

disbursing officials conform their

systems to these requirements.

Steps Important to Implementation of

the Proposed Rule

This section discusses three (3)

primary steps which are important to

the implementation of the proposed

rule:

(1) Federal agencies obtain TINs from

Federal payment recipients;

(2) To request payments, agencies

prepare and certify vouchers; and

(3) Disbursing officials examine

vouchers and make payments

accordingly.

(1) Federal agencies obtain TINs from

Federal payment recipients. The
Federal Register / Vol. 62, No. 169 / Tuesday, September 2, 1997 / Proposed Rules 46429

authority for agencies to collect TINs is

found in 31 U.S.C. 7701(c)(1) or other

laws authorizing the collection of TINs.

The DCIA requires that all agencies

obtain TINs from persons doing

business with the agency. As previously

noted, this requirement does not apply

to payments made to other Federal

agencies.

To minimize the burden of

compliance with the DCIA requirement

to provide TINs on certified vouchers,

FMS encourages agencies to obtain the

TIN when the agency first has direct

contact with a person. Typically, this is

when the agency also is obtaining the

routing transit number, account number,

and other information needed to make

payments electronically, in accordance

with 31 CFR Part 208. For payments by

check, this will occur when the agency

is obtaining the name and address of the

payee. There are other advantages to

obtaining the TIN when an agency first

has direct contact with a person. For

example, collecting contractor data

required for payment requests at the

start of the procurement process

enhances the Government’s ability to

issue timely payment upon receipt of

subsequent invoices.

(2) To request payments, agencies

prepare and certify vouchers. To make

a payment, a Federal payment certifying

agency prepares a voucher to authorize

disbursement of Federal funds to a

recipient. An authorized official of the

payment agency reviews the voucher

and certifies that: The information

stated on the voucher and supporting

documents is accurate; the

appropriation or fund involved is

legally available for payment; and the

services have been rendered, or

advancing funds before services are

rendered is legally proper. Although

responsible for the information

contained on the voucher, an authorized

official of the payment agency may be

relieved from liability under certain

circumstances. For example, an

authorized official may be relieved from

liability if the certification was based on

official records and if the official did not

know, and could not have discovered

the correct information through

reasonable diligence and inquiry. 31

U.S.C. 3528(b).

As noted above, 31 U.S.C. 3325(d)

requires that executive agencies include

with each certified voucher submitted to

a disbursing official the TIN of each

person to whom payment may be made

under the voucher. A certified voucher

may contain information for a single

payment request or multiple payment

requests. A TIN is required for each

payment request. In addition, if an

individual payment request has

multiple payees, a TIN is required for

each payee.

Because 31 U.S.C. 3325(d) requires

that the TIN be included with executive

agency payment requests, a payment

request lacking the TIN is not in proper

form, and this proposed rule requires

the disbursing official to reject the

payment request.

(3) Disbursing officials examine

vouchers and make payments

accordingly. Disbursing officials must

reject executive agency payment

requests without TINs. A disbursing

official (who in most cases is different

than the certifying official) examines a

certified payment voucher submitted by

a payment agency. If the voucher is in

proper form, properly certified and

approved, and computed correctly, the

disbursing official makes payments as

directed in the voucher. A disbursing

official may reject a voucher which is

not in proper form pursuant to the

performance of the disbursing official’s

duties under 31 U.S.C. 3325(a), or other

governing authorities as applicable to

disbursing officials of the Department of

Defense. If an individual payment

request is not in proper form, the

disbursing official will reject the

payment request in question, not the

entire voucher. In general, to reject a

payment request means that the

disbursing official will not issue the

payment to the named payee. The

disbursing official will notify the

payment certifying agency that the

payment request has been rejected. For

the payment to be issued, the certifying

agency is required to resubmit the

payment request in proper form.

Pursuant to 31 U.S.C. 3325, an

executive agency payment request

which does not contain the TIN is not

in proper form. Therefore, for the

reasons discussed above, this proposed

rule requires disbursing officials to

reject any executive agency payment

request that does not include the TIN of

the payee(s).

This proposed rule applies to

Treasury and non-Treasury disbursing

officials. In mandating administrative

offset, the DCIA does not distinguish

between Treasury disbursing officials

and non-Treasury disbursing officials.

The DCIA directs disbursing officials of

the Department of the Treasury, the

Department of Defense, the United

States Postal Service, or any other

government corporation, or any

disbursing official of the United States

designated by the Secretary of the

Treasury to conduct administrative

offset to collect claims owed to the

United States. Therefore, because the

TIN is required to conduct

administrative offset, both Treasury and

non-Treasury disbursing officials must

reject executive agency payment

requests without TINs.

Disbursing officials are not

responsible for any liabilities resulting

from the rejection of a certified payment

voucher that is not in proper form under

this proposed rule. Certifying agencies

may be responsible for any resulting

liabilities depending on the facts and

circumstances surrounding the rejection

of the payment voucher. For example, if

a payee has supplied a valid TIN to the

certifying agency and the agency has

failed to include the TIN on a certified

payment voucher, the certifying agency

may be responsible for any resulting

Prompt Payment Act penalties that

accrue. See 31 U.S.C. 3901–3907

(Prompt Payment).

Request for Comments

The public is invited to submit

comments on the proposed rule.

Comments received in response to this

notice of proposed rulemaking will be

critical in determining exceptions or

waivers of the TIN requirement that may

be established for any specific class or

type of payments or payees.

To justify any exceptions or waivers

of the TIN requirement, agencies must

provide supportable information on the

volume and dollar value of payments,

and on the nature of impediments to

compliance. Agencies should

distinguish between operational

impediments, such as the need to

update payment systems, and legal

impediments, such as agency

regulations or laws prohibiting

disclosure of the TIN.

Agencies specifically are invited to

comment on the issues identified below:

• The status of agency compliance

with the requirement of the DCIA to

furnish TINs with each certified

voucher and actions planned to achieve

compliance;

• Issues anticipated in connection

with furnishing TINs for any specific

class or type of payments or payees;

• Issues anticipated due to the

rejection of payment requests which do

not include TINs for any specific class

or type of payments or payees;

• Issues regarding foreign currency

payments, or payments to foreign

governments, foreign nationals

employed overseas, or other specific

classes of payees overseas; and

• Disbursing official readiness to

reject payment requests which do not

include TINs and actions planned to

achieve readiness.

Regulatory Analysis

Regulatory Flexibility Act. It is hereby

certified that this regulation will not
46430 Federal Register / Vol. 62, No. 169 / Tuesday, September 2, 1997 / Proposed Rules

have a significant economic impact on

a substantial number of small entities.

Accordingly, a regulatory flexibility

analysis is not required. The DCIA and

this regulation require executive

agencies to include the TIN with each

certified voucher. Most small entities

already will have a TIN for tax

purposes. Furnishing the TIN to

executive agencies will impose little or

no burden.

Paperwork Reduction Act. The

requirements of the Paperwork

Reduction Act (PRA), 44 U.S.C. 3501 et

seq., do not apply to this proposed rule.

The DCIA requirement that agencies

provide payees’ TINs on payment

vouchers submitted to disbursing

officials is not a collection of

information subject to the PRA. The

PRA does not apply to the collection of

information from agencies,

instrumentalities, or employees of the

United States. 44 U.S.C. 3502(3)(A).

Executive Order (E.O.) 12866. It has

been determined that this regulation is

not a significant regulatory action as

defined in E.O. 12866.

List of Subjects in 31 CFR Part 212

Administrative practice and

procedure, Electronic funds transfers,

Reporting and recordkeeping

requirements.

Authority and Issuance

For the reasons set out in the

preamble, 31 CFR Part 212 is proposed

to be added to read as follows:

PART 212—TAXPAYER IDENTIFYING

NUMBER REQUIREMENT

Sec.

212.1 Scope.

212.2 Definitions.

212.3 Agency and disbursing official

responsibilities.

212.4 Effective date.

Authority: 5 U.S.C. 301; 31 U.S.C. 321,

3301, 3302, 3321, 3325, and 3528.

§ 212.1 Scope.

This part governs the responsibility of

certifying and disbursing officials and

heads of agencies in regard to the

inclusion of taxpayer identifying

numbers (TINs) on certified vouchers.

This part applies to all payments

certified by executive agencies pursuant

to 31 U.S.C. 3325. This part also applies

to all payments certified by the

Department of Defense.

§ 212.2 Definitions.

For purposes of this part:

Certified voucher or voucher means a

payment voucher certified pursuant to

31 U.S.C. 3528(a). A voucher may

contain one or more payment requests.

Certifying official means an officer or

employee of an executive agency having

written authorization from the head of

the agency to certify vouchers.

Disbursing official or disbursing

officer means an official who has

authority to disburse public money

pursuant to 31 U.S.C. 3321 or another

law, including an official of the

Department of the Treasury, the

Department of Defense, the United

States Postal Service, or any other

government corporation, or any official

of the United States designated by the

Secretary of the Treasury to disburse

public money.

Executive agency means a

department, agency, or instrumentality

in the executive branch of the United

States Government.

Payment means a sum of money

transferred to a person in satisfaction of

an obligation.

Payment certifying agency means any

executive agency that has transmitted a

voucher to a disbursing official for

disbursement.

Payment request means an individual

request for a payment on a certified

voucher. A voucher may contain one or

more payment requests.

Person means a natural person,

corporation, trust, estate, partnership,

cooperative, association, agency, State

or any other entity that receives a

Federal payment, other than another

Federal agency.

Reject means to suspend payment

processing before funds are disbursed to

the payee, cancel the payment request,

and credit any funds that had been

allocated for the payment to the

payment certifying agency.

Taxpayer identifying number (TIN)

means the identifying number described

in section 6109 of the Internal Revenue

Code of 1986 (26 U.S.C. 6109). Taxpayer

identification number has the same

meaning as taxpayer identifying

number.

§ 212.3 Agency and disbursing official

responsibilities.

(a) As required by 31 U.S.C. 3325(d),

the head of an executive agency or the

certifying official shall include with

each certified voucher submitted to a

disbursing official pursuant to 31 U.S.C.

3325(a) the TIN of each person to whom

payment may be made under the

voucher. When a voucher contains more

than one payment request, a TIN is

required for each payment request. In

the case of multiple payees the TIN of

each payee shall be included.

(b) A disbursing official will reject

any payment request that does not

include the TIN required in paragraph

(a) of this section.

(c) The disbursing official will notify

the payment certifying agency of any

payment requests rejected under this

section. For payment to be made, the

payment certifying agency will resubmit

the payment request with the TIN

required in paragraph (a) of this section.

§ 212.4 Effective date.

This part applies to payments

certified after [insert date 6 months after

date of publication of final rule].

Dated: August 26, 1997.

Michael T. Smokovich,

Acting Commissioner.

[FR Doc. 97–23179 Filed 8–29–97; 8:45 am]

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