I
104TH CONGRESS
1ST SESSION
H. R. 757
To amend the Internal Revenue Code of 1986 to provide that the amount
of an overpayment otherwise payable to any person shall be reduced
by the amount of past-due, legally enforceable State tax obligations
of such person.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 31, 1995
Mr. JACOBS (for himself, Mr. MCCRERY, and Mr. MORAN) 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 provide
that the amount of an overpayment otherwise payable
to any person shall be reduced by the amount of past-
due, legally enforceable State tax obligations of such
person.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. OFFSET OF PAST-DUE, LEGALLY ENFORCEABLE
STATE TAX OBLIGATIONS AGAINST OVERPAY-
MENTS.
(a) IN GENERAL.—Section 6402 of the Internal Rev-
enue Code of 1986 is amended by redesignating sub-
sections (e) through (i) as subsections (f) through (j), re-
spectively, and by inserting after subsection (d) the follow-
ing new subsection:
‘‘(e) COLLECTION
OF PAST-DUE, LEGALLY EN-
FORCEABLE STATE TAX OBLIGATIONS.—
‘‘(1) IN GENERAL.—Upon receiving notice from
any State that a named person owes a past-due, le-
gally enforceable State tax obligation to such State,
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 State tax obligation;
‘‘(B) pay the amount by which such over-
payment is reduced under subparagraph (A) to
such State and notify such State of such per-
son’s name, taxpayer identification number, ad-
dress, and the amount collected; and
‘‘(C) 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 State tax obligation.
If an offset is made pursuant to a joint return, the
notice under subparagraph (B) shall include the
names, taxpayer identification numbers and address-
es of each person filing such return.
‘‘(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, and
‘‘(iii) subsection (d) with respect to
any past-due, legally enforceable debt owed
to a Federal agency, and
‘‘(B) before such overpayment is credited
to the future liability for any Federal internal
revenue tax of such person pursuant to sub-
section (b).
If the Secretary receives notice from one or more
State agencies of more than one debt subject to
paragraph (1) that is owed by such person to such
an agency, any overpayment by such person shall be
applied against such debts in the order in which
such debts accrued.
‘‘(3) NOTICE; CONSIDERATION OF EVIDENCE.—
No State may take action under this subsection until
such State—
‘‘(A) notifies the person owing the past-due
State tax liability that the State proposes to
take action pursuant to this section,
‘‘(B) gives such person at least 60 days to
present evidence that all or part of such liability
is not past-due or not legally enforceable,
‘‘(C) considers any evidence presented by
such person and determines that an amount of
such debt is past-due and legally enforceable,
and
‘‘(D) satisfies such other conditions as the
Secretary may prescribe to ensure that the de-
termination made under subparagraph (C) is
valid and that the State has made reasonable
efforts to obtain payment of such State tax ob-
ligation.
‘‘(4) PAST-DUE, LEGALLY ENFORCEABLE STATE
TAX OBLIGATION.—For purposes of this subsection,
the term ‘past-due, legally enforceable State tax obli-
gation’ means a debt—