dcl9329.htm

pilot project/IRS Full Collection Process

DC-9329

June 21, 1993

Dear Colleague:

We are pleased that your State has agreed to participate in the pilot project on the IRS Full Collection Process. Enclosed in this package is an information sheet detailing the pilot project, a checklist to be completed for each case, and a copy of the Application for the Collection of Delinquent Child Support by the Internal Revenue Service (FORM OCSE-20) - which has been modified for the pilot project. For a selected number of States (MI, MO, TN, VA, WA), we have also enclosed printouts of prescreened cases. IRS has agreed to waive the $122.50 fee for the pilot project.

Our goal is to identify ways in which the Full Collection Process might be improved. We will be analyzing the results to determine what changes need to be implemented to develop a more successful remedy to collect child support.

We look forward to working closely with your State in this endeavor. If you have any questions or comments please contact Roy Nix at (202) 401-9391 or Wanda Campbell at (202) 401-5752.

Sincerely,

Robert C. Harris

Acting Deputy Director

Office of Child Support

Enforcement

Enclosures

INFORMATION SHEET ON FULL COLLECTION PILOT PROJECT

Over the past few months the Internal Revenue Service (IRS) and OCSE have been meeting to discuss how the Full Collection Process might be improved. Because of the limited number of cases that have been submitted to IRS for certification, OCSE and IRS agreed that it will be beneficial to conduct a pilot test to analyze the types of cases submitted by States; look closely at which cases result in collections; and analyze the nature of the enforcement taken by IRS. For example, can better identification of assets increase the likelihood of a collection?

Twelve States will be participating in the pilot, including at least one State from each region. Many of the States selected are States that are currently utilizing Project 1099 for location purposes. Each State is to submit 70 cases to OCSE. It is important to note however, that all 70 cases may not be forwarded to IRS. After final submission to IRS, OCSE will notify each State to indicate which cases were certified for Full Collections.

CASE SELECTION

Some States will select cases from their most recent submittal to Project 1099. For the pilot States which submitted cases to Project 1099 for the second quarter (February's match), OCSE has conducted some pre-screening to help identify cases with significant assets. A printout of these cases along with a description of how the cases were selected will be provided to the appropriate State. The State will then select 70 cases from the pre-screened cases. The State must determine whether or not there is an arrearage; whether action is already being taken on the case (i.e., wage withholding); whether a wage withholding is now possible because of this new locate information; and whether or not the case meets the criteria set out in the enclosed checklist. If a wage withholding already exists or the employment information supplied through Project 1099 can be verified allowing the State to begin a wage withholding, the case should not be submitted for Full Collection in the absence of extraordinary circumstances.

States which are not receiving pre-screened cases from OCSE should also focus their efforts on selecting cases with identified assets. This may be possible using information previously obtained through Project 1099. Individuals who are self-employed or have other significant "miscellaneous" income should be considered in particular for the pilot project. All States should give priority to interstate cases. In both instances, experience indicates that such cases have the best prospects for a successful outcome through the Full Collection process.

SUBMITTING CASES

Once cases are selected, they will be sent to the OCSE Special Collections Unit using the enclosed Full Collection Process application form and the checklist developed for the pilot. Please forward all cases directly to the OCSE Special Collections Unit no later than August 06, 1993. Cases will then be forwarded to IRS which will assess liability and send a 60-day notice to the obligor as required by Federal law. At that time, the obligor may either pay on demand or agree to an installment plan, or the IRS will attempt to seize assets. OCSE and IRS will be analyzing the method of collection for the pilot cases. If IRS is unable to locate the individual, OCSE will be notified that the case(s) are temporarily uncollectible. If additional information can be obtained by the IRS or supplied by the State and the individual is located, IRS will continue efforts to collect the child support.

UPDATING ARREARAGES BASED ON POST-SUBMITTAL COLLECTIONS

If, after the case is submitted to IRS, the State independently receives a collection on the case, an update must be reported using the application form and sent to the Special Collections Unit. While it is important to report a decrease in the arrearage balance if the State receives a collection or to delete the case if the State receives payment in full from the obligor, States will be unable to increase arrearages for the pilot. This is considered by IRS to be a new assessment requiring a new 60-day notice to the obligor.

These procedures for the pilot vary somewhat from the normal Full Collections Process. First, States do not need to document previous collection activity, and the usual $122.50 fee has been waived for the pilot. Secondly, providing a copy of the order(s) is optional for the pilot cases. In addition, some fields on the application (OCSE Form-20) are not applicable to the pilot project. This pilot will help us identify precisely what data are essential to IRS in its enforcement efforts (i.e., asset identification and location data) with the goal of automating the process in the future. If you have any questions, please feel free to contact Roy Nix at (202) 401-9391 or Wanda Campbell at (202) 401-5752.

Mail the pilot cases to:

OCSE, Special Collections Unit 370 L'Enfant Promenade, SW

Washington DC, 20447-0001.

FULL COLLECTION CRITERIA CHECKLIST

FOR PILOT PROJECT

This checklist and an application form (OCSE-20) must be completed for each case. Staple the checklist to the application form and forward by no later than August 06, 1993 to:

OCSE, Special Collections Unit

370 L'Enfant Promenade, SW

Washington, DC 20447-0001

Non-Custodial Parent's Name_____________________________________

Social Security Number__________________________________________

Please check:

_____Services are being provided under Title IV-D for this case. Only the State with the assignment of rights or a IV-D application may submit the case.

_____There is a court or administrative order for this case.

_____There is an arrearage of at least $2,500. (For the pilot we have increased the arrearage amount from $750 to $2,500. States are encouraged to submit cases with higher arrearages.)

_____It has been at least six months since the last full collection submittal.

_____This is a case involving self-employment or other forms of non-wage income, significant assets, concealment of assets, or similar characteristics. (Priority should be given to interstate cases, but exceptions can be made at the discretion of the State.)

______This case has recently been submitted to the Federal Tax Refund Offset Program. (This fulfills the requirement that the State has made a reasonable effort to collect. Exceptions can be made on a limited basis.)

______This case was recently submitted to Project 1099 and was selected by OCSE as part of the pre-screening process. (Not all cases will meet this criterion.)

Case submittals must include the following information on the OCSE FORM-20. Please check where applicable:

____Obligor's name

____Obligor's SSN

____Obligor's address (Must provide if obligor's employer is unknown)

____ Provided through Project 1099

____ Address information contained in State records/files

____Obligor's place of employment (Must provide if obligor's address is unknown)

____Provided through Project 1099

____Address information contained in State records/files

____The date the address and employer information last verified.

____ Obligor is self-employed or a subcontractor

____The amount owed under the support order.

____ State contact person (and phone number)

____ Asset information (as extensive and complete as possible)

GUIDELINES FOR COMPLETING APPLICATION

FOR FULL COLLECTION PILOT PROJECT

An application must be completed for each case submitted for the pilot project using the following guidelines:

1. Complete all blocks in area number 1.

2.In area number 2, complete only block (a.) for the pilot project. Block (b.) is not applicable for the pilot project. Complete block (c.) only if the obligor makes payments towards the arrearage independent from IRS, and you need to delete the case or lower the arrearage.

3.Area number 3 is optional.

4.Area number 4 must be completed by all States participating in the pilot project. States using 1099 asset information may want to xerox the asset information provided by OCSE from Project 1099 and attach copies to the application. States opting to do this should complete the area "See Attachment for Assets". For the States not using 1099 asset information, a sample of the type of information requested is provided:

Home: 1234 Harris Street

Arlington, VA 12345

purchase price: $346,000

Other Real Estate: Vacation Condominium - Ocean City, MD

estimated value: $120,000

Auto: 1990 Honda Accord: purchase price: $20,000

Stocks: 100 shares of J.C. Penney stock

Checking and Savings Account with First National Bank: Account Number 123456-09

(The more assets identified, the greater likelihood of collection)

5. Area number 5 is not applicable for the pilot project.

6.The signature block should be completed by an authorized individual such as the State IV-D director or the director's designee, and indicate the title of the individual signing, the State Agency and the date.

7. The Regional Representative's signature block is not applicable for the pilot project as the cases will be submitted directly to Central Office and will not go through the Regional Office. The contact block, however, should indicate the name and telephone number of the person OCSE or IRS can contact if there are any questions regarding the case.

The following key is used on the application:

* = Complete all blocks containing this indicator

N/A = Not Applicable for pilot project - leave blank

O = Optional for the pilot project

PROJECT 1099 INFORMATION

Attached are cases OCSE pre-screened for consideration of submittal for the Full Collection pilot project. These were drawn from the 1099 cases that you submitted during the second quarter of 1993. These cases were chosen because 1099 information indicates that these individuals either have the wages that would enable them to pay their child support or have assets could be seized if voluntary payment of their child support is not made.

There are four attachments - the first set (1A and 2A) consists of a listing headed TAX REFUND OFFSET PROGRAM and a computer printout containing the corresponding 1099 information. This set of information was extracted based on the wages earned by the individual. The listing headed Tax Refund Offset Program (1A) provides the Social Security Number (SSN), obligor's name, the amount of the arrearage at the time of submittal for tax refund offset and the amount of money collected through tax refund offset (PY93) as of May 13, if any. The cases submitted to Project 1099 for the second quarter were matched against the 1993 masterfile for tax offset to determine which cases had arrearages. These cases were drawn from a larger list of cases based upon the arrearage amount and the amount of the assets. Those chosen represent cases with the highest arrearages and greatest assets.

The 1099 attachment (2A) is a computer printout containing the corresponding 1099 information for each case. If a case is chosen for submittal, you should use/copy this information (asset identification) and attach it to the OCSE FORM-20 along with any other asset information which the State has on this case. Both are in numerical order by Social Security Number (SSN).

The second set of attachments (1B and 2B) also consists of a listing headed TAX REFUND OFFSET PROGRAM (1B) and a computer printout (2B) containing the corresponding 1099 information. This set was extracted based on the miscellaneous income earned by the individual and is listed in descending order from the highest income earned to the lowest. These attachments are in the same format as attachments 1A and 2A. Again, if a case is chosen for submittal, you should use/copy the 1099 information and attach it to the OCSE FORM-20.

It is the State's role to review the enclosed material to determine which cases meet the criteria for submittal. If you cannot select 70 cases to submit from the lists, OCSE can supply more cases for consideration. If you need more information or have any questions, please contact Roy Nix at (202) 401-9391 or Wanda Campbell at (202) 401-5752.