I
107TH CONGRESS
1ST SESSION
H. R. 3261
To amend the Internal Revenue Code of 1986 to expand the offset against
overpayments to include all State and local taxes owed by any person,
whether or not a resident of the State seeking the offset, and for
other purposes.
IN THE HOUSE OF REPRESENTATIVES
NOVEMBER 8, 2001
Mr. MORAN of Virginia 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 expand
the offset against overpayments to include all State and
local taxes owed by any person, whether or not a resident
of the State seeking the offset, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. EXPANSION OF OFFSETS AGAINST OVERPAY-
MENTS.
(a) OFFSETS NOT LIMITED
TO RESIDENTS
OF
STATE SEEKING OFFSET.—Subsection (e) of section 6402
of the Internal Revenue Code of 1986 (relating to collec-
tion of past-due legally enforceable State income tax obli-
gations) is amended by striking paragraph (2) and by re-
designating paragraphs (3) through (7) as paragraphs (2)
through (6), respectively.
(b) COLLECTION OF ALL STATE AND LOCAL GOV-
ERNMENT TAX OBLIGATIONS.—
(1) IN
GENERAL.—Paragraph (1) of section
6402(e) of such Code is amended to read as follows:
‘‘(1) IN GENERAL.—Upon receiving notice from
any State or local government that a named person
owes a past-due, legally enforceable tax obligation to
such 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) to
such government and notify such government of
such person’s name, taxpayer identification
number, address, 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 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 ad-
dresses of each person filing such return.’’
(2) CONFORMING AMENDMENTS.—
(A) Subsection (e) of section 6402 of such
Code is amended by striking ‘‘State income
tax’’ each place it appears and inserting ‘‘State
or local tax’’.
(B) The last sentence of paragraph (2) of
section 6402(e) of such Code, as redesignated
by subsection (a), is amended by striking ‘‘the
State’’ and inserting ‘‘the State or local govern-
ments of such State’’.
(C) Paragraph (3) of section 6402(e) of
such Code, as redesignated by subsection (a), is
amended—
(i) by striking the material preceding
subparagraph (A) and inserting the fol-
lowing:
‘‘(3) NOTICE; CONSIDERATION OF EVIDENCE.—
No State or local government may take action under
this subsection until such government—’’, and
(ii) by striking ‘‘the State’’ in sub-
paragraphs (A) and (D) and inserting
‘‘such government’’.
(D) Paragraph (4) of section 6402(e) of
such Code, as redesignated by subsection (a), is
amended by striking the last sentence.
(E) Paragraph (5) of section 6402(e) of
such Code, as redesignated by subsection (a), is
amended—
(i) by striking ‘‘States’’ each place it
appears and inserting ‘‘State and local
governments’’, and
(ii) by striking ‘‘State income taxes’’
and inserting ‘‘State or local taxes’’.
(F) Paragraph (6) of section 6402(e) of
such Code, as redesignated by subsection (a), is
amended—
(i) by striking ‘‘STATE’’ in the heading
and inserting ‘‘STATE OR LOCAL GOVERN-
MENT’’,
(ii) by striking ‘‘Any State’’ and in-
serting ‘‘Any State or local government’’,
and
(iii) by striking ‘‘such State’’ each
place it appears and inserting ‘‘such gov-
ernment’’.
(G) Subsection (f) of section 6402 of such
Code is amended by striking ‘‘or State’’ and in-
serting ‘‘, State, or local government’’.
(H) Subsection (h) of section 6402 of such
Code is amended—
(i) by striking ‘‘STATES’’ in the head-
ing and inserting ‘‘STATE
AND LOCAL
GOVERNMENTS’’, and
(ii) by striking ‘‘State’’ in the text
and inserting ‘‘State or local government’’.
(c) USE
OF FIRST CLASS MAIL
ON TAX JUDG-
MENTS.—Paragraph (3) of section 6402(e) of such Code,
as redesignated by subsection (a), is amended by adding
at the end the following new flush sentence:
‘‘In the case of a debt described in paragraph
(4)(A)(i)(I), the requirement in subparagraph (A) to
use certified mail shall be treated as met by using
first-class mail sent to the taxpayer’s last known ad-
dress.’’
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to refunds payable after December
31, 2002.
Æ