Goto Section: 1.1911 | 1.1913 | Table of Contents
Revised as of September 1, 2021
Goto Year:2020 |
§ 1.1912 Collection by administrative offset.
(a) Scope. (1) The term administrative offset has the meaning provided
in § 1.1901.
(2) This section does not apply to:
(i) Debts arising under the Social Security Act, except as provided in
42 U.S.C. 404;
(ii) Payments made under the Social Security Act, except as provided
for in 31 U.S.C. 3716(c) (see 31 CFR 285.4, Federal Benefit Offset);
(iii) Debts arising under, or payments made under, the Internal Revenue
Code (see 31 CFR 285.2, Tax Refund Offset) or the tariff laws of the
(iv) Offsets against Federal salaries to the extent these standards are
inconsistent with regulations published to implement such offsets under
5 U.S.C. 5514 and 31 U.S.C. 3716 (see 5 CFR part 550, subpart K, and 31
CFR 285.7, Federal Salary Offset);
(v) Offsets under 31 U.S.C. 3728 against a judgment obtained by a
debtor against the United States;
(vi) Offsets or recoupments under common law, State law, or Federal
statutes specifically prohibiting offsets or recoupments of particular
types of debts; or
(vii) Offsets in the course of judicial proceedings, including
(3) Unless otherwise provided for by contract or law, debts or payments
that are not subject to administrative offset under 31 U.S.C. 3716 may
be collected by administrative offset under the common law or other
applicable statutory authority.
(4) Unless otherwise provided by law, administrative offset of payments
under the authority of 31 U.S.C. 3716 to collect a debt may not be
conducted more than 10 years after the Government's right to collect
the debt first accrued, unless facts material to the Government's right
to collect the debt were not known and could not reasonably have been
known by the official or officials of the Government who were charged
with the responsibility to discover and collect such debts. This
limitation does not apply to debts reduced to a judgment.
(5) In bankruptcy cases, the Commission will seek legal advice from its
counsel concerning the impact of the Bankruptcy Code, particularly 11
U.S.C. 106, 362, and 553, on pending or contemplated collections by
(b) Mandatory centralized administrative offset. (1) The Commission is
required to refer past due, legally enforceable nontax debts which are
over 120 days delinquent to the Treasury for collection by centralized
administrative offset. Debts which are less than 120 days delinquent
also may be referred to the Treasury for this purpose. See FCCS for
debt certification requirements.
(2) The names and taxpayer identifying numbers (TINs) of debtors who
owe debts referred to the Treasury as described in paragraph (b)(1) of
this section shall be compared to the names and TINs on payments to be
made by Federal disbursing officials. Federal disbursing officials
include disbursing officials of Treasury, the Department of Defense,
the United States Postal Service, other Government corporations, and
disbursing officials of the United States designated by the Treasury.
When the name and TIN of a debtor match the name and TIN of a payee and
all other requirements for offset have been met, the payment will be
offset to satisfy the debt.
(3) Federal disbursing officials will notify the debtor/payee in
writing that an offset has occurred to satisfy, in part or in full, a
past due, legally enforceable delinquent debt. The notice shall include
a description of the type and amount of the payment from which the
offset was taken, the amount of offset that was taken, the identity of
the creditor agency requesting the offset, and a contact point within
the creditor agency who will respond to questions regarding the offset.
(4)(i) Before referring a delinquent debt to the Treasury for
administrative offset, and subject to any agreement and/or waiver to
the contrary by the debtor, the Commission shall ensure that offsets
are initiated only after the debtor:
(A) Has been sent written notice of the type and amount of the debt,
the intention of the Commission to use administrative offset to collect
the debt, and an explanation of the debtor's rights under 31 U.S.C.
(B) The debtor has been given:
(1) The opportunity to request within 15 days of the date of the
written notice, after which opportunity is deemed waived, by the
debtor, to inspect and copy Commission records related to the debt;
(2) The opportunity, unless otherwise waived by the debtor, for a
review within the Commission of the determination of indebtedness; and
(3) The opportunity to request within 15 days of the date of the
written notice, after which the opportunity is deemed waived by the
debtor, for the debtor to make a written agreement to repay the debt.
(ii) The Commission may omit the procedures set forth in paragraph
(b)(4)(i) of this section when:
(A) The offset is in the nature of a recoupment;
(B) The debt arises under a contract as set forth in Cecile Industries,
Inc. v. Cheney, 995 F.2d 1052 (Fed. Cir. 1993) (notice and other
procedural protections set forth in 31 U.S.C. 3716(a) do not supplant
or restrict established procedures for contractual offsets accommodated
by the Contracts Disputes Act); or
(C) In the case of non-centralized administrative offsets conducted
under paragraph (c) of this section, the Commission first learns of the
existence of the amount owed by the debtor when there is insufficient
time before payment would be made to the debtor/payee to allow for
prior notice and an opportunity for review. When prior notice and an
opportunity for review are omitted, the Commission shall give the
debtor such notice and an opportunity for review as soon as practicable
and shall promptly refund any money ultimately found not to have been
owed to the Government.
(iii) When the Commission previously has given a debtor any of the
required notice and review opportunities with respect to a particular
debt (see 31 CFR 901.2), the Commission need not duplicate such notice
and review opportunities before administrative offset may be initiated.
(5) Before the Commission refers delinquent debts to the Treasury, the
Office of Managing Director must certify, in a form acceptable to the
(i) The debt(s) is (are) past due and legally enforceable; and
(ii) The Commission has complied with all due process requirements
under 31 U.S.C. 3716(a) and its regulations.
(6) Payments that are prohibited by law from being offset are exempt
from centralized administrative offset. The Treasury shall exempt
payments under means-tested programs from centralized administrative
offset when requested in writing by the head of the payment certifying
or authorizing agency. Also, the Treasury may exempt other classes of
payments from centralized offset upon the written request of the head
of the payment certifying or authorizing agency.
(7) Benefit payments made under the Social Security Act (42 U.S.C. 301
et seq.), part B of the Black Lung Benefits Act (30 U.S.C. 921 et
seq.), and any law administered by the Railroad Retirement Board (other
than tier 2 benefits), may be offset only in accordance with Treasury
regulations, issued in consultation with the Social Security
Administration, the Railroad Retirement Board, and the Office of
Management and Budget. See 31 CFR 285.4.
(8) In accordance with 31 U.S.C. 3716(f), the Treasury may waive the
provisions of the Computer Matching and Privacy Protection Act of 1988
concerning matching agreements and post-match notification and
verification (5 U.S.C. 552a(o) and (p)) for centralized administrative
offset upon receipt of a certification from a creditor agency that the
due process requirements enumerated in 31 U.S.C. 3716(a) have been met.
The certification of a debt in accordance with paragraph (b)(5) of this
section will satisfy this requirement. If such a waiver is granted,
only the Data Integrity Board of the Department of the Treasury is
required to oversee any matching activities, in accordance with 31
U.S.C. 3716(g). This waiver authority does not apply to offsets
conducted under paragraphs (c) and (d) of this section.
(c) Non-centralized administrative offset. (1) Generally,
non-centralized administrative offsets are ad hoc case-by-case offsets
that the Commission conducts, at the Commission's discretion,
internally or in cooperation with the agency certifying or authorizing
payments to the debtor. Unless otherwise prohibited by law, when
centralized administrative offset is not available or appropriate, past
due, legally enforceable nontax delinquent debts may be collected
through non-centralized administrative offset. In these cases, a
creditor agency may make a request directly to a payment-authorizing
agency to offset a payment due a debtor to collect a delinquent debt.
For example, it may be appropriate for a creditor agency to request
that the Office of Personnel Management (OPM) offset a Federal
employee's lump-sum payment upon leaving Government service to satisfy
an unpaid advance.
(2) The Commission will make reasonable effort to ensure that such
offsets may occur only after:
(i) The debtor has been provided due process as set forth in paragraph
(b)(4) of this section (subject to any waiver by the debtor); and
(ii) The payment authorizing agency has received written certification
from the Commission that the debtor owes the past due, legally
enforceable delinquent debt in the amount stated, and that the creditor
agency has fully complied with its regulations concerning
(3) Payment authorizing agencies shall comply with offset requests by
creditor agencies to collect debts owed to the United States, unless
the offset would not be in the best interests of the United States with
respect to the program of the payment authorizing agency, or would
otherwise be contrary to law. Appropriate use should be made of the
cooperative efforts of other agencies in effecting collection by
(4) When collecting multiple debts by non-centralized administrative
offset, agencies should apply the recovered amounts to those debts in
accordance with the best interests of the United States, as determined
by the facts and circumstances of the particular case, particularly the
applicable statute of limitations.
[ 69 FR 27848 , May 17, 2004, as amended at 76 FR 24393 , May 2, 2011; 80 FR 43031 , July 21, 2015]
Goto Section: 1.1911 | 1.1913
Goto Year: 2020 |
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