[Federal Register Volume 62, Number 169 (Tuesday, September 2, 1997)]
[Proposed Rules]
[Pages 46428-46430]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-23179]



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Part V





Department of the Treasury





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Fiscal Service



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31 CFR Part 212



Taxpayer Identifying Number Requirement; Proposed Rule

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

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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.

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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

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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:
    <bullet> The status of agency compliance with the requirement of 
the DCIA to furnish TINs with each certified voucher and actions 
planned to achieve compliance;
    <bullet> Issues anticipated in connection with furnishing TINs for 
any specific class or type of payments or payees;
    <bullet> Issues anticipated due to the rejection of payment 
requests which do not include TINs for any specific class or type of 
payments or payees;
    <bullet> Issues regarding foreign currency payments, or payments to 
foreign governments, foreign nationals employed overseas, or other 
specific classes of payees overseas; and
    <bullet> 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

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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.


Sec. 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.


Sec. 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.


Sec. 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.


Sec. 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]
BILLING CODE 4810-35-U