45 CFR 303.72

Giving Hope and Support to America's Children

_303.72   Requests for collection of past-due
support by Federal tax refund offset.

        (a) Past-due support qualifying for offset. Past-due
support as defined in _301.1 of this chapter qualifies for offset
if:

        (1) There has been an assignment of the support rights
under _232.11 of this title or section 471(a)(17) of the Act to the
State making the request for offset or the IV - D agency is
providing services under _302.33 of this chapter.

        (2) For support which has been assigned to the State under
_232.11 of this title or section 471(a)(17) of the Act:

        (i) The amount of the support is not less than $150; and 

        (ii) The support has been delinquent for three months or
longer.

        (3) For support owed in cases where the IV - D agency is
providing IV - D services under _302.33 of this chapter:

        (i) The support is owed to or on behalf of a qualified
child, or a qualified child and the parent with whom the child is
living if the same support order includes support for the child and
the parent. 

        (ii) The amount of support is not less than $500; 

        (iii) At State option, the amount has accrued since the
State IV - D agency began to enforce the support order; and 

        (iv) The State has checked its records to determine if an
AFDC or foster care maintenance assigned arrearage exists with
respect to the non-AFDC individual or family.

        (4) The IV - D agency has in its records:

        (i) A copy of the order and any modifications upon which
the amount referred is based which specify the date of issuance and
amount of support;

        (ii) A copy of the payment record, or, if there is no
payment record, an affidavit signed by the custodial parent
attesting to the amount of support owed; and

        (iii) In non-AFDC cases, the custodial parent's current
address.

        (5) Before submittal, the State IV - D agency has verified
the accuracy of the name and social security number of the absent
parent and the accuracy of the past-due support amount. If the
State IV - D agency has verified this information previously, it
need not reverify it.

        (6) A notification of liability for past-due support has
been received by the Secretary of the Treasury as prescribed by
paragraph (c)(2) of this section.

        (b) Notification to OCSE of liability for past-due support.
(1) A State IV - D agency shall submit a notification (or
notifications) of liability for past-due support on a magnetic tape
to the Office by the submittal date specified by the Office in
instructions.

        (2) The notification of liability for past-due support
shall contain with respect to each delinquency:

        (i) The name of the taxpayer who owes the past-due support;

        (ii) The social security number of that taxpayer;

        (iii) The amount of past-due support owed;

        (iv) The State codes as contained in the Federal
Information Processing Standards (FIPS) publication of the National
Bureau of Standards and also promulgated by the General Services
Administration in Worldwide Geographical Location Codes; and

        (v) Whether the past-due support is due an individual who
applied for services under _302.33 of this chapter.

        (3) The notification of liability for past-due support may
contain with respect to each delinquency the taxpayer's IV - D case
number and FIPS code for the local IV - D agency where the case
originated.

        (c) Review of requests by the Office. (1) The Deputy
Director will review each request to determine whether it meets the
requirements of this section.

        (2) If a request meets all requirements, the Deputy
Director will transmit the request to the Secretary of the Treasury
and will notify the State IV - D agency in writing of the
transmittal.

        (3) If a request does not meet all requirements, the Deputy
Director will attempt to correct the request in consultation with
the State IV - D agency.

        (4) If a request cannot be corrected through consultation,
the Deputy Director will return it to the State IV - D agency with
a written explanation of why the request could not be transmitted
to the Secretary of the Treasury.

        (d) Notification of changes in case status. (1) The State
referring past-due support of offset must, in interstate
situations, notify any other State involved in enforcing the
support order when it submits an interstate case for offset and
when it receives the offset amount from the IRS.

        (2) The State IV - D agency shall within time frames
established by the Office in instructions, notify the Deputy
Director in writing of any deletion of an amount referred for
collection by Federal tax refund offset or any decrease in the
amount if the decrease is significant according to guidelines
developed by the State. The notification shall contain the
information specified in paragraph (b) of this section.

        (e) Notices of offset -- (1) Advance. The State IV - D
agency, or the Office, if the State requests and the Office agrees,
shall send a written advance notice to inform an absent parent that
the amount of his or her past-due support will be referred to the
IRS for collection by Federal tax refund offset. The notice must
inform absent parents: 

        (i) Of their right to contest the State's determination
that past-due support is owed or the amount of past-due support;

        (ii) Of their right to an administrative review by the
submitting State or at the absent parent's request the State with
the order upon which the referral for offset is based;

        (iii) Of the procedures and timeframe for contacting the IV
- D agency in the submitting State to request administrative
review; and 

        (iv) That, in the case of a joint return, the IRS will
notify the absent parent's spouse at the time of offset regarding
the steps to take to protect the share of the refund which may be
payable to that spouse. If the IV - D agency sends the notice, it
must meet the conditions specified by the Office in instructions.

        (2) At offset. The IRS will notify the absent parent that
the offset has been made. The IRS will also notify any individual
who filed a joint return with the absent parent of the steps to
take in order to secure a proper share of the refund.

        (f) Procedures for contesting in intrastate cases. (1) Upon
receipt of a complaint from an absent parent in response to the
advance notice required in paragraph (e)(1) of this section or
concerning a tax refund which has already been offset, the IV - D
agency must send a notice to the absent parent and, in non-AFDC
cases the custodial parent, of the time and place of the
administrative review of the complaint and conduct the review to
determine the validity of the complaint.

        (2) If the complaint concerns a joint tax refund that has
not yet been offset, the IV - D agency must inform the absent
parent that the IRS will notify the absent parent's spouse at the
time of offset regarding the steps to take to secure his or her
proper share of the refund. If the complaint concerns a joint tax
refund which has already been offset, the IV - D agency must refer
the absent parent to the IRS.

        (3) If the administrative review results in a deletion of,
or decrease in, the amount referred for offset, the IV - D agency
must notify OCSE in writing within time frames established by the
Office and include the information specified in paragraph (b) of
this section.

        (4) If, as a result of the administrative review, an amount
which has already been offset is found to have exceeded the amount
of past-due support owed, the IV - D agency must take steps to
refund the excess amount to the absent parent promptly.

        (g) Procedures for contesting in interstate cases. (1) If
the absent parent requests an administrative review in the
submitting State, the IV - D agency must meet the requirements in
paragraph (f) of this section.

        (2) If the complaint cannot be resolved by the submitting
State and the absent parent requests an administrative review in
the State with the order upon which the referral for offset is
based, the submitting State must notify the State with the order of
the request for an administrative review and provide that State
with all necessary information, including the information listed
under paragraph (a)(4) of this section, within 10 days of the
absent parent's request for an administrative review.

        (3) The State with the order must send a notice to the
absent parent and, in non-AFDC cases the custodial parent, of the
time and place of the administrative review, conduct the review and
make a decision within 45 days of receipt of the notice and
information from the submitting State.

        (4) If the administrative review results in a deletion of,
or decrease in, the amount referred for offset, the State with the
order must notify the Office in writing within time frames
established by the Office and include the information specified in
paragraph (b) of this section.

        (5) Upon resolution of a complaint after an offset has been
made, the State with the order must notify the submitting State of
its decision promptly.

        (6) When an administrative review is conducted in the State
with the order, the submitting State is bound by the decision made
by the State with the order.

        (7) Based on the decision of the State with the order, the
IV - D agency in the submitting State must take steps to refund any
excess amount to the absent parent promptly.

        (8) In computing incentives under _304.12 of this part, if
the case is referred to the State with the order for an
administrative review, the collections made as a result of Federal
tax refund offset will be treated as having been collected in full
by both the submitting State and the State with the order.

        (h) Distribution of collections. (1) Collections received
by the IV - D agency as a result of refund offset to satisfy AFDC
or non-AFDC past-due support shall be distributed as past-due
support as required under _302.51(b) (4) and (5) and (e) of this
chapter.

        (2) Collections received by the IV - D agency in foster
care maintenance cases shall be distributed as past-due support
under _302.52(b) (3) and (4) of this chapter.

        (3) The IV - D agency must inform individuals receiving
services under _302.33 of this chapter in advance that amounts
offset will be applied first to satisfy any past-due support which
has been assigned to the State under _232.11 of this title, 42 CFR
433.146, or section 471(a)(17) of the Act and submitted for Federal
tax refund offset.

        (4) If the amount collected is in excess of the amounts
required to be distributed under _302.51 (b) (4) and (5) and (e) or
_302.52(b) (3) and (4) of this chapter, the IV - D agency must
repay the excess to the absent parent whose refund was offset or to
the parties filing a joint return within a reasonable period in
accordance with State law.

        (5) In cases where the Secretary of the Treasury, through
OCSE, notifies the State that an offset is being made to satisfy
non-AFDC past-due support from a refund based on a joint return,
the State may delay distribution until notified that the
unobligated spouse's proper share of the refund has been paid or
for a period not to exceed six months from notification of offset,
whichever is earlier.

        (6) Collections from offset may be applied only against the
past-due support which was specified in the advance notice
described in paragraph (e)(1) of this section.

        (i) Payment of fee. (1) A refund offset fee, in such amount
as the Secretary of the Treasury and the Secretary of Health and
Human Services have agreed to be sufficient to reimburse the IRS
for the full cost of the offset procedure, shall be deducted from
the offset amount and credited to the IRS appropriations which bore
all or part of the costs involved in making the collection. The
full amount offset must be credited against the obligor's payment
record. The fee which the Secretary of the Treasury may impose with
respect to non-AFDC submittals shall not exceed $25 per submittal. 

        (2) The State IV - D agency may charge an individual who is
receiving services under _302.33(a)(1) (i) or (iii) of this chapter
a fee not to exceed $25 for submitting past-due support for Federal
tax refund offset. The State must inform the individual in advance
of the amount of any fee charged.

        (3) Any State which requests the Office to send the advance
written notice under paragraph (e)(1) of this section will be
charged a fee, in an amount established by the Office in
instructions, for printing and mailing of pre-offset notices. This
fee shall be credited to the Health and Human Services
appropriations which bore all or part of the costs involved in
making the collection. 

        (j) Each State involved in a referral of past-due support
for offset must comply with instructions issued by the Office.

(Approved by the Office of Management and Budget under control
number 0960 - 0385)

[50 FR 19651, May 9, 1985; 50 FR 31719, Aug. 6, 1985, as amended at
51 FR 37731, Oct. 24, 1986; 53 FR 47710, Nov. 25, 1988; 54 FR
32312, Aug. 4, 1989; 56 FR 8005, Feb. 26, 1991; 58 FR 41437, Aug.
4, 1993]
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