I 
111TH CONGRESS 
1ST SESSION H. R. 3060 
To amend the Internal Revenue Code of 1986 to allow certain local tax 
debts to be collected through the reduction of Federal tax refunds. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 25, 2009 
Mr. MORAN of Virginia (for himself, Mr. CONNOLLY of Virginia, Mr. GOOD-
LATTE, Mr. WITTMAN, and Mr. WOLF) introduced the following bill; 
which was referred to the Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to allow cer-
tain local tax debts to be collected through the reduction 
of Federal tax refunds. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. COLLECTION OF PAST-DUE LEGALLY ENFORCE-
ABLE LOCAL GOVERNMENT TAX OBLIGA-
TIONS. 
(a) IN GENERAL.—Section 6402 of the Internal Rev-
enue Code of 1986 (relating to authority to make credits 
or refunds) is amended by redesignating subsections (g) 
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through (l) as subsections (h) through (m), respectively, 
and by inserting after subsection (f) the following: 
‘‘(g) COLLECTION
OF
PAST-DUE
LEGALLY
EN-
FORCEABLE LOCAL GOVERNMENT TAX OBLIGATIONS.— 
‘‘(1) IN GENERAL.—Upon receiving notice from 
any State on behalf of a local government, or from 
any eligible local government, that a named person 
owes a past-due, legally enforceable local government 
tax obligation to the local government, the Secretary 
shall, under such conditions as may be prescribed by 
the Secretary— 
‘‘(A) reduce the amount of any overpay-
ment payable to such person by the amount of 
such tax obligation; 
‘‘(B) pay the amount by which such over-
payment is reduced under subparagraph (A)— 
‘‘(i) to such State for purposes of pay-
ment by the State to the local government 
on behalf of which such State submitted 
the notice; or 
‘‘(ii) to the eligible local government 
that submitted the notice; 
‘‘(C) notify the State or eligible local gov-
ernment of the person’s name, taxpayer identi-
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fication number, address, and the amount col-
lected; and 
‘‘(D) notify the person making such over-
payment that the overpayment has been re-
duced by an amount necessary to satisfy a past- 
due, legally enforceable tax obligation. 
‘‘(2) PRIORITIES FOR OFFSET.—Any overpay-
ment by a person shall be reduced pursuant to this 
subsection— 
‘‘(A) after such overpayment is reduced 
pursuant to— 
‘‘(i) subsection (a) with respect to any 
liability for any internal revenue tax on the 
part of the person who made the overpay-
ment; 
‘‘(ii) subsection (c) with respect to 
past-due support; 
‘‘(iii) subsection (d) with respect to 
any past-due, legally enforceable debt owed 
to a Federal agency; 
‘‘(iv) subsection (e) with respect to 
any past-due, legally enforceable State in-
come tax obligation; and 
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‘‘(v) subsection (f) with respect to any 
covered unemployment compensation debt; 
and 
‘‘(B) before such overpayment is credited 
to the future liability for any Federal internal 
revenue tax of such person. 
If the Secretary receives notice from one or more 
States or eligible local governments of more than 
one tax obligation subject to paragraph (1) that is 
owed by such person to any local government, any 
overpayment by such person shall be applied against 
such debts in the order in which such notices were 
filed. 
‘‘(3) NOTICE; CONSIDERATION OF EVIDENCE.— 
‘‘(A) STATE.—No State may take action 
under this subsection (on behalf of a local gov-
ernment) until the local government certifies to 
the State that the local government— 
‘‘(i) has notified the person owing the 
past-due, legally enforceable local govern-
ment tax obligation by certified mail with 
return receipt that the State (on behalf of 
the local government) proposes to take ac-
tion pursuant to this section; 
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‘‘(ii) has given such person at least 60 
days to present evidence that all or part of 
such liability is not past-due or not legally 
enforceable; 
‘‘(iii) has considered any evidence pre-
sented by such person and has determined 
that an amount of such debt is past-due 
and legally enforceable; and 
‘‘(iv) has satisfied such other condi-
tions as the Secretary may prescribe to en-
sure that the determination made under 
clause (iii) is valid and that the local gov-
ernment has made reasonable efforts to ob-
tain payment of such tax obligation. 
‘‘(B) ELIGIBLE LOCAL GOVERNMENT.—No 
eligible local government may take action under 
this subsection until the local government— 
‘‘(i) has notified the person owing the 
past-due, legally enforceable local govern-
ment tax obligation by certified mail with 
return receipt that the local government 
proposes to take action pursuant to this 
section; 
‘‘(ii) has given such person at least 60 
days to present evidence that all or part of 
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such liability is not past-due or not legally 
enforceable; 
‘‘(iii) has considered any evidence pre-
sented by such person and has determined 
that an amount of such debt is past-due 
and legally enforceable; and 
‘‘(iv) has satisfied such other condi-
tions as the Secretary may prescribe to en-
sure that the determination made under 
clause (iii) is valid and that the local gov-
ernment has made reasonable efforts to ob-
tain payment of such tax obligation. 
‘‘(4) PAST-DUE, LEGALLY ENFORCEABLE LOCAL 
GOVERNMENT TAX OBLIGATION.—In this subsection, 
the term ‘past-due, legally enforceable local govern-
ment tax obligation’ means a tax debt— 
‘‘(A)(i) which resulted from— 
‘‘(I) a judgment rendered by a court 
of competent jurisdiction which has deter-
mined an amount of tax to be due to a 
local government; or 
‘‘(II) a determination after an admin-
istrative hearing which has determined an 
amount of tax to be due to a local govern-
ment; and 
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