II 

110TH CONGRESS 

1ST SESSION S. 1287 

To amend the Internal Revenue Code of 1986 to allow an offset against 

income tax refunds to pay for State judicial debts that are past-due. 

IN THE SENATE OF THE UNITED STATES 

MAY 3, 2007 

Mr. SMITH (for himself and Mr. KENNEDY) introduced the following bill; 

which was read twice and referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to allow an 

offset against income tax refunds to pay for State judicial debts that are past-due. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. OFFSET OF STATE JUDICIAL DEBTS AGAINST 

4 INCOME TAX REFUND. 

5 (a) IN GENERAL.—Section 6402 of the Internal Rev6 enue Code of 1986 (relating to authority to make credits 

7 or refunds) is amended by redesignating subsections (f) 

8 through (k) as subsections (g) through (l), respectively, 

9 and by inserting after subsection (e) the following: 


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1 ‘‘(f) COLLECTION OF PAST-DUE, LEGALLY EN2 FORCEABLE STATE JUDICIAL DEBTS.— 

3 ‘‘(1) IN GENERAL.—Upon receiving notice from 

4 any State judicial branch or State agency designated 

5 by the chief justice of the State’s highest court that 

6 a named person owes a past-due, legally enforceable 

7 State judicial debt to or in such State, the Secretary 

8 shall, under such conditions as may be prescribed by 

9 the Secretary— 

10 ‘‘(A) reduce the amount of any overpay11 ment payable to such person by the amount of 

12 such State judicial debt; 

13 ‘‘(B) pay the amount by which such over14 payment is reduced under subparagraph (A) to 

15 such State judicial branch or State agency and 

16 notify such State judicial branch or State agen17 cy of such person’s name, taxpayer identifica18 tion number, address, and the amount collected; 

19 and 

20 ‘‘(C) notify the person making such over21 payment that the overpayment has been re22 duced by an amount necessary to satisfy a past23 due, legally enforceable State judicial debt. 

24 If an offset is made pursuant to a joint return, the 

25 notice under subparagraph (B) shall include the 


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1 names, taxpayer identification numbers, and ad2 dresses of each person filing such return. 

3 ‘‘(2) PRIORITIES FOR OFFSET.—Any overpay4 ment by a person shall be reduced pursuant to this 

5 subsection— 

6 ‘‘(A) after such overpayment is reduced 

7 pursuant to— 

8 ‘‘(i) subsection (a) with respect to any 

9 liability for any internal revenue tax on the 

10 part of the person who made the overpay11 ment; 

12 ‘‘(ii) subsection (c) with respect to 

13 past-due support; 

14 ‘‘(iii) subsection (d) with respect to 

15 any past-due, legally enforceable debt owed 

16 to a Federal agency; and 

17 ‘‘(iv) subsection (e) with respect to 

18 any past-due, legally enforceable State in19 come tax obligations; and 

20 ‘‘(B) before such overpayment is credited 

21 to the future liability for any Federal internal 

22 revenue tax of such person pursuant to sub23 section (b). 

24 If the Secretary receives notice from 1 or more State 

25 agencies, or from 1 or more State agencies and the 


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1 State judicial branch, of more than 1 debt subject 

2 to paragraph (1) that is owed by such person to 

3 such State agency or State judicial branch, any over4 payment by such person shall be applied against 

5 such debts in the order in which such debts accrued. 

6 ‘‘(3) NOTICE; CONSIDERATION OF EVIDENCE.— 

7 Rules similar to the rules of subsection (e)(4) shall 

8 apply with respect to debts under this subsection. 

9 ‘‘(4) PAST-DUE, LEGALLY ENFORCEABLE STATE

10 JUDICIAL DEBT.— 

11 ‘‘(A) IN GENERAL.—For purposes of this 

12 subsection, the term ‘past-due, legally enforce13 able State judicial debt’ means a debt— 

14 ‘‘(i) which resulted from a judgment 

15 or sentence rendered by any court or tri16 bunal of competent jurisdiction which— 

17 ‘‘(I) handles criminal or traffic 

18 cases in the State; and 

19 ‘‘(II) has determined an amount 

20 of State judicial debt to be due; and 

21 ‘‘(ii) which resulted from a State judi22 cial debt which has been assessed and is 

23 past-due but not collected. 

24 ‘‘(B) STATE JUDICIAL DEBT.—For pur25 poses of this paragraph, the term ‘State judicial 


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1 debt’ includes court costs, fees, fines, assess2 ments, restitution to victims of crime, and other 

3 monies resulting from a judgment or sentence 

4 rendered by any court or tribunal of competent 

5 jurisdiction handling criminal or traffic cases in 

6 the State. 

7 ‘‘(5) REGULATIONS.—The Secretary shall issue 

8 regulations prescribing the time and manner in 

9 which State judicial branches and State agencies 

10 must submit notices of past-due, legally enforceable 

11 State judicial debts and the necessary information 

12 that must be contained in or accompany such no13 tices. The regulations shall specify the types of State 

14 judicial monies and the minimum amount of debt to 

15 which the reduction procedure established by para16 graph (1) may be applied. The regulations may re17 quire State judicial branches and State agencies to 

18 pay a fee to reimburse the Secretary for the cost of 

19 applying such procedure. Any fee paid to the Sec20 retary pursuant to the preceding sentence shall be 

21 used to reimburse appropriations which bore all or 

22 part of the cost of applying such procedure. 

23 ‘‘(6) ERRONEOUS PAYMENT TO STATE.—Any 

24 State judicial branch or State agency receiving no25 tice from the Secretary that an erroneous payment 


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1 has been made to such State judicial branch or 

2 State agency under paragraph (1) shall pay prompt3 ly to the Secretary, in accordance with such regula4 tions as the Secretary may prescribe, an amount 

5 equal to the amount of such erroneous payment 

6 (without regard to whether any other amounts pay7 able to such State judicial branch or State agency 

8 under such paragraph have been paid to such State 

9 judicial branch or State agency).’’. 

10 (b) DISCLOSURE OF RETURN INFORMATION.—Sec11 tion 6103(l)(10) of the Internal Revenue Code of 1986 

12 (relating to disclosure of certain information to agencies 

13 requesting a reduction under subsection (c), (d), or (e) of 

14 section 6402) is amended by striking ‘‘or (e)’’ each place 

15 it appears in the text and heading and inserting ‘‘(e), or 

16 (f)’’. 

17 (c) CONFORMING AMENDMENTS.— 

18 (1) Section 6402(a) of the Internal Revenue 

19 Code of 1986 is amended by striking ‘‘and (e)’’ and 

20 inserting ‘‘(e), and (f)’’. 

21 (2) Paragraph (2) of section 6402(d) of such 

22 Code is amended by striking ‘‘subsection (e)’’ and 

23 inserting ‘‘subsections (e) and (f)’’. 

24 (3) Paragraph (3)(B) of section 6402(e) of 

25 such Code is amended to read as follows: 


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1 ‘‘(B) before such overpayment is— 

2 ‘‘(i) reduced pursuant to subsection 

3 (f) with respect to past-due, legally en4 forceable State judicial debts, and 

5 ‘‘(ii) credited to the future liability for 

6 any Federal internal revenue tax of such 

7 person pursuant to subsection (b).’’. 

8 (4) Section 6402(g) of such Code, as so redesig9 nated, is amended by striking ‘‘or (e)’’ and inserting 

10 ‘‘(e), or (f)’’. 

11 (5) Section 6402(i) of such Code, as so redesig12 nated, is amended by striking ‘‘or (e)’’ and inserting 

13 ‘‘, (e), or (f)’’. 

14 (d) EFFECTIVE DATE.—The amendments made by 

15 this Act shall apply to refunds payable for taxable years 

16 beginning after December 31, 2006. 

Æ 


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