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Collection of Child Support by the IRS through Offsetting Federal Income Tax Refunds, 1992

AT-92-03

Published: August 6, 1992
Information About:
State/Local Child Support Agencies
Topics:
Federal Systems, Data Exchange/Matching, Federal Offset Program (FOP)
Types:
Policy, Action Transmittals (AT)
Tags:
Collection & Enforcement Systems, Internal Revenue Service (IRS), User Fees

ACTION TRANSMITTAL

August 6, 1992

OCSE-AT-92-03

TO:STATE AGENCIES ADMINISTERING CHILD SUPPORT ENFORCEMENT PLANS APPROVED UNDER TITLE IV-D OF THE SOCIAL SECURITY ACT AND OTHER INTERESTED INDIVIDUALS.

SUBJECT:Collection of Child Support by the Internal Revenue Service (IRS) through offsetting Federal income tax refunds. This Action Transmittal applies to those cases in which the State has an assignment of support rights under section 402(a)(26) or 471(a)(17) of the Social Security Act, or cases in which the State is enforcing the support obligation pursuant to section 454(6) of the Social Security Act.

ATTACHMENT:Instructions for submitting requests for Collection of Child Support Debts by the IRS through the Federal tax refund offset process.

BACKGROUND:During 1981, 1982, 1983, 1984, 1985, 1986, 1987, 1988, 1989, 1990, and 1991 the Office of Child Support Enforcement (OCSE) issued instructions to define the procedures States must use for the preparation, submission, and processing of cases for collection by offsetting past-due child support obligations with Federal income tax refunds (OCSE AT-81-19, 81-29, 82-14, 83-14, 84-05, 85-07, 86-15, 87-6, 88-12, 89-13, 90-06, and 91-05). This Action Transmittal supersedes these documents and outlines the revised procedure for the submitting and processing of cases.

SUPERSEDED MATERIAL:OCSE-AT-91-05 DATED JULY 26, 1991.

INQUIRIES TO:OCSE Special Collections Unit, (202) 401-9389

______________________________

Allie Page Matthews

Deputy Director

Office of Child Support

Enforcement

TO ALL STATE IV-D DIRECTORS AUG 6 1992

DC 92-32

Dear Colleague:

Enclosed please find the Action Transmittal regarding the Federal Tax Refund Offset Program's Processing Year (PY) 93. From the start of the Offset Program, each year we have tried to make changes to improve its efficiency while continuing to ensure fair treatment of taxpayers and their dependents. The changes for PY93 are underlined in the transmittal. Please share the enclosed information with appropriate program and technical staff so proper procedures can be established and deadlines met with accurate information.

The Federal Office of Child Support Enforcement (OCSE) deadlines are established based on Internal Revenue Service (IRS) processing dates. Consequently, it is imperative that all States abide by the timeframes and dates set out in these instructions. Since some of the dates have changed for PY93, please review the schedule to ensure that deadlines are met. States should not call for deadline extensions.

Some important date changes for PY93 are:

oJune 1 - July 10: new test tape period;

oAugust 24: the earliest date for submitting final tapes to OCSE;

oAugust 28: States to provide Exhibits R, S, M, X , and BB. Local Address tapes due to OCSE; (Please note that this is a new tape format from last year.)

oSeptember 18: the due date for final submittal tapes from States for which OCSE issues pre-offset notices;

oDecember 4: the due date for final submittal tapes from States that issue their own notices.

oDecember 11: the new cut-off date for OCSE to accept updates for PY93 cases before they are sent to IRS.

oDecember 18: the new cut-off date for reporting PY92 updates. Remember, no cut-off date for State payments.

Page 2 - Dear Colleague

I know that you join me in making this program better each year. For it is only with the cooperation and determination of both the States and OCSE that the quality of this program will continue to increase. I appreciate your past support and thank you for your efforts in the upcoming year. Please contact the Special Collections Unit at (202) 401-9389 if you need any assistance.

Sincerely,

Allie Page Matthews

Deputy Director

Office of Child Support

Enforcement

Enclosure

TABLE OF CONTENTS

PAGE

I.Submitting Certified Requests.................... 1

A.Eligible Cases.............................. 1

B.Criteria For Submittal...................... 2

1.AFDC and Foster Care Cases............. 2

2.Non-AFDC and Medicaid-only Cases....... 3

C.Submitting Interstate Cases................. 4

D.Interstate Transmittal Form................. 5

E.Case Submittals............................. 5

F.Edit Validation............................. 6

G.Submission Date............................. 7

H.Submitting Test Cases To OCSE............... 7

II.Pre-Offset Notice and Complaint Procedures....... 8

A.Pre-Offset Notice........................... 8

B.Complaint Procedures........................ 11

1.Procedures for Contesting in Intrastate Cases 11

2.Procedures for Contesting in Interstate Cases 11

3.Guidelines for Social Security Number (SSN)

Error Problems......................... 13

PAGE

III.Updates To Case Submissions................. 14

A.Deletions and Modifications............ 15

B.Update Reporting By Transfer State..... 17

C.State Payments (Refunds)............... 17

IV.Processing Offsets.......................... 19

A.Offset Processing By IRS............... 19

B.Processing Monies That Have Been Offset 21

C.Distribution Of Collections From Offsets 21

D.Processing Offsets For Cases Submitted By

Two or More States..................... 23

E.Adjustments To Collections............. 23

V.IRS Service Fee Statement and Adjustment Billing 24

VI.Inquiries To OCSE........................... 24

VII.Inquiries To States......................... 24

VIIIReporting................................... 25

IX.Security and Safeguarding Requirements...... 25

X.Quality Control............................. 25

XI.Data Transmission Methods................... 25

Schedule For 1993 Processing Year........... 27

Narrative Description of Major Reports...... 29

Exhibit Directory........................... 32

Exhibits.................................... 34

FEDERAL TAX REFUND OFFSET PROGRAM

On August 13, 1981 the Federal Tax Refund Offset Program was enacted by Congress (see section 2331, P.L. 97-35). This unique use of a Federal collections mechanism to recover delinquent child support debts involves the interaction of all State IV-D agencies and two Federal agencies (OCSE and IRS). This cooperative effort has resulted in total collections of over $3.8 billion since the Program began. As of June 1992, over 6.9 million tax refunds were intercepted since the program started offsetting refunds in 1982.

In November 1990, the President signed into law the Omnibus Budget Reconciliation Act of 1990 (P.L. 101-508), which made changes to the Federal Tax Refund Offset Program for non-AFDC cases. Section 5011(b) authorizes the use of the Federal Income Tax Refund Offset process in non-AFDC cases for the collection of past-due spousal support when the parent is living with the child and spousal support and child support are included in the same order. In addition, cases may be submitted where there is past-due support due on behalf of adult disabled children for whom there is a support order in effect. These changes took effect January 1, 1991.

I. SUBMITTING CERTIFIED REQUESTS

A. ELIGIBLE CASES

Only IV-D cases are eligible for tax refund offset. In other words, only cases in which the State has an assignment of support rights under section 402(a)(26) or 471(a)(17) of the Act, or cases in which the State is enforcing the support obligation pursuant to section 454(6) of the Act can be submitted for tax refund offset. All States must have and use procedures for tax refund offset in non-AFDC as well as AFDC and foster care cases. Under Section 303.72 of the Program Standards Regulations which became effective in October 1990, all cases which meet the criteria for submittal must be submitted for offset. A custodial parent who has applied for IV-D services (and paid the application fee) may be charged an additional fee, not to exceed $25, for this service. Some States which recover costs of services directly from the custodial parent, pursuant to 45 CFR 302.33(d)(ii), deduct this fee from the tax refund when it is intercepted. It is not necessary to obtain the consent of the non-AFDC custodial parent before submitting the case. In addition, the non-AFDC custodial parent no longer has the option as to whether or not the case is submitted for offset. Custodial parents seeking tax refund offset services should be advised that their application for IV-D services will necessitate other enforcement action by the IV-D Agency. For example, if the arrearage equals or exceeds the amount of support payable for 1 month, and if the absent parent's place of employment is known, wage withholding is mandatory. To assist IV-D agencies in collecting sufficient background information and properly informing applicants for IV-D services concerning the tax refund offset program, OCSE has developed a Non-AFDC Federal Tax Refund Offset Information Form (see Exhibit T). Whether or not this form is used, the IV-D Agency should ensure that applicants for non-AFDC services understand:

o what the applicant must pay for tax refund offset;

o how long it may be before an offset is distributed

(including the possibility of a 6-month delay in

joint return cases);

othat any State submitting an assigned arrearage for offset must receive its share of the refund before IRS is permitted to offset an unassigned arrearage; and

othat any payment the family receives may have to be returned to the IV-D Agency if there is an adjustment within 6 years following the end of the tax year. (The Tax Reform Act of 1986 extended the Injured Spouse Claim and Allocation Form 8379 filing period from three years to six).

In addition, the custodial parent, in all tax refund offset cases, may be required to sign an affidavit attesting to the amount of the child support arrears if the agency cannot verify the amount owed using its records.

B. CRITERIA FOR SUBMITTAL

States must certify (see Exhibit A) that cases meet the following requirements to be eligible for the Federal Tax Refund Offset Program. Requirements for eligibility for AFDC/foster care and non-AFDC are quite similar. However, for the sake of clarity and since the cases must be submitted separately, the requisite criteria are listed individually for each classification.

1. AFDC AND FOSTER CARE CASES

oThe support obligation must have been established under a court order or an order of an administrative process established under State law and must have been assigned to the State pursuant to section 402(a)(26) or 471(a)(17) of the Act.

o The amount past-due must not be less than $150.00.

oThe amount owed must have been delinquent for 3 months or longer. The requirement that past-due support must be at least 3 months in arrears is met if the past-due support is 3 months over-due as of January 1.

oThe delinquency is for support and maintenance of a child, or of a child and the parent with whom the child is living (maintenance includes medical support, but only if a specific dollar amount is included in the order).

oThe State IV-D Agency has verified the accuracy of the arrears, has a copy of the order and any modifications and has a copy of the payment record or an affidavit signed by the custodial parent

attesting to the amount of support owed. The State IV-D Agency has verified the accuracy of the absent parent's name and Social Security Number

(SSN). In interstate cases the request may be made only by a State which has taken an assignment under section 402(a)(26) or 471(a)(17) of the Act.

2. NON-AFDC AND MEDICAID-ONLY CASES

oThe support obligation must have been established under a court order or an order of an administrative process established under State law and the State must be enforcing the order under section 454(6) of the Act. Medicaid-only cases, required to be enforced under section 454(5) of the Act, are treated as section 454(6) cases, and are subject to the following requirements.

oThe amount of past-due support must not be less than $500.00.

oAt State option, amounts certified in non-AFDC cases may be limited to past-due support which accrued since the State IV-D Agency began to enforce the support order.

oThe support must be owed to or on behalf of a minor child. Past-due support due adult handicapped children may be collected through the Federal income tax refund offset process if there is a support order in effect for the child and the child, while a minor, was determined to be disabled under Title II (Federal Old-Age, Survivors, and Disability Insurance Benefits Program) or Title XVI (Supplemental Security Income for the Aged, Blind, and Disabled program) of the Social Security Act.

oNon-AFDC cases may be submitted on behalf of a parent when the parent is living with the child and spousal support and child support are included in the same support order.

oThe State has verified the accuracy of the arrears, has a copy of the order and any modifications, and has a copy of the payment record or an affidavit signed by the custodial parent attesting to the amount of support owed.

oThe State has checked its records to see if there are AFDC or foster care arrearages.

oThe State IV-D Agency has verified the accuracy of the absent parent's name and SSN.

oThe State IV-D Agency must have the custodial parent's current address.

Past-due support may not include fees or court costs or any other non-child support debts owed to the State or to the family. Past-due support may include medical support, but only if a specific dollar amount is included in the order. Interest may be

included in the amount certified for offset only if it is considered support under State law. Certifications for offset in AFDC and foster care cases may include an amount for support and maintenance of a child, or of a child and the parent with whom the child is living. Spousal support is eligible for certification in non-AFDC cases in cases in which the parent is living with the child and spousal support and child support are included in the same support order. Non-AFDC referrals on behalf of an individual who is no longer a minor even if the arrearage accrued while the person was a minor child may not be submitted for offset, except in cases in which past-due support is due on behalf of adult disabled children for whom there is a support order in effect and the child, while a minor was determined to be disabled under Title II or XVI. In other words, the child must be a minor as of December 31 of the year in which that case is submitted to OCSE for offset.

The State may not submit a case in which the absent parent or his or her spouse has filed for bankruptcy under Titles VII, XI, XII, & XIII of the United States Code. The State may not submit such cases "unless the automatic stay under section 362 of the Bankruptcy Code has been lifted or is no longer in effect with respect to the individual owing the obligation... and the obligation was not discharged by the bankruptcy proceeding." If the State does submit a case in this category, IRS will not offset any refund, or in the event of an offset will reverse the offset.

C. SUBMITTING INTERSTATE CASES

The State submitting past-due support for offset must inform 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 IRS. If the debt submitted is based upon another State's support order, the submitting State may find it necessary to communicate with the other State for purposes of verification of arrears or to obtain a copy of the order or the payment record prior to submittal for refund offset.

In a non-AFDC interstate case, the State in which an application for IV-D services has been filed pursuant to section 302.33 (i.e., the initiating State), must submit the past-due support for offset. It is necessary to specify which State must submit past-due support owed in non-AFDC cases for offset to avoid both States submitting the same arrearage. The initiating State is in the best position to pay the custodial parent any amount offset quickly and to handle any necessary adjustments to the amount of offset based on an amended tax return.

If a State submits a case for refund offset on the basis of another State's child support order, the submitting State should comply with the other State's laws regarding refund offset. Several States have been involved in litigation which has resulted in the imposition of specific safeguards to prevent the

wrongful interception of taxpayers' refunds. These requirements for an expanded notice and hearing procedures may affect the enforcement of any child support order issued within the State. The regulations providing for administrative review in either the submitting State or the State which issued the order (upon request by the taxpayer) appear to have eliminated most problems in this area. States conducting administrative reviews should not delete cases submitted by another State simply because they would not have been submitted, for policy reasons, by the State with the order.

D. INTERSTATE TRANSMITTAL FORM

OCSE has developed an interstate transmittal form to facilitate communication and coordination between States regarding child support enforcement efforts, especially wage withholding and tax refund offset. It has been designed for use in obtaining and/or verifying information for the purpose of submitting a case for offset when the order and/or pay record for the absent parent are in another State. It can also be used as a transfer document when the case is being referred to the State with the order for the purpose of conducting an administrative review. In such cases the submitting State should provide the certified arrearage, not the current arrearage; and, if there are

cumulative orders, which serve as the basis for the submittal, it should be clearly indicated that the forum State need only verify a portion of the amount submitted for offset. Likewise, the State with the order can use the form for reporting the results of the administrative review to the State that submitted the case for offset. (See Exhibit U for the Child Support Enforcement Interstate Transmittal.)

E. CASE SUBMITTALS

It is important that all submittals be as accurate as possible, both at the time of issuing the pre-offset notice and when the tape is sent to IRS. In order to ensure that States include all case updates prior to issuance of the pre-offset notice, tapes received by OCSE prior to August 24, 1992 will be returned to the State for further processing and no priority for collection will be granted until August 24th.

Since the expansion of the Offset Program to non-AFDC families, it is possible for a State to submit the same SSN twice, once for assigned arrears and once for non-AFDC. When submitting cases involving the same SSN, States should include on the tape only one record reflecting combined local requests for AFDC/foster care cases, and one record reflecting combined local requests for non-AFDC. Duplicate AFDC or foster care case submittals or duplicate non-AFDC case submittals from a State will not be accepted. Therefore, both the AFDC/foster care case and the non-AFDC case (with the greatest arrearage) will be accepted and all others will be rejected. Each State must combine its duplicate cases in either category and submit them as one case for offset.

States should submit one consolidated file on magnetic tape to OCSE with a completed certification. However, multiple tape submissions will be accepted from a State provided that each submission is accompanied by a completed certification. Multiple tape submissions should only occur if time does not permit the State to merge all local requests into a single submission or if the State lacks the capability to merge data onto magnetic tape. It is important to the ultimate effectiveness of the program that States take the time to review their final case submittals.

Every time a record is submitted to OCSE for processing, i.e., final submittals or updates, the State must indicate whether the transaction pertains to an AFDC/foster care case (A) or to a nonAFDC case (N). Every update and State payment must also contain the corresponding processing year. Any records not containing

this information will be rejected. (See Exhibit N for Tape Submission Requirements.) Any record submitted that does not contain the case type indicator will be rejected. Likewise, all reports issued by OCSE will include a case type indicator for each record, as well as the appropriate processing year.

If there are multiple submittals for the same absent parent from more than one State, the first tape certified to OCSE will receive priority for collection. After this initial priority, satisfaction of State claims is based on the amount of the delinquency (from highest to lowest). All arrears assigned under either 402(a)(26) or 471(a)(17) will be satisfied before any nonAFDC delinquency can be offset. It should be noted that other Federal debts in addition to back taxes may be offset by interception of tax refunds. IRS debts have first priority over all other offsets. AFDC and foster care arrearages come next, followed by all other Federal debts, and non-AFDC child support arrearages including medicaid-only cases.

F. EDIT VALIDATION

Each State submission will be processed through an Edit Validation program prior to acceptance for forwarding to IRS. The State will receive an Edit Validation Report which indicates types of errors and percentage of errors. OCSE will analyze these statistics and make the final decision as to what corrective actions, if any, will be taken. Possible actions include:

oTape returned to State for correction and resubmittal (if time permits);

o Errors corrected by OCSE; or

o Errors rejected (not correctable).

Detailed tape instructions and specifications are contained in Exhibit H.

G. SUBMISSION DATE

The deadline date for final case submittal is dependent upon whether OCSE or the State issues the pre-offset notice. For States requesting OCSE to send their pre-offset notices, all requests for offset must be received by OCSE by September 18. It is imperative that States meet this deadline so OCSE can ensure that case submittals are processed prior to the IRS deadlines. States issuing their own pre-offset notices have until December 4 to submit their final offset requests, but only if the State certifies by IV-D Director's signature, that notices for the prior processing year were mailed by October 31 and that notices for Processing Year 1993 will be mailed by October 31, 1992. Updates will not be processed from those States submitting in November/December. Please make sure that the tape is accurate at submittal time. A State which issues its own pre-offset notice can nonetheless submit by September 18 and thus remain competitive in terms of priority listing for multiple-state case submittals.

Detailed tape instructions and specifications are contained in Exhibit B.

H. SUBMITTING TEST CASES TO OCSE

State Agencies are accorded one opportunity to test the accuracy of the case records and to correct errors prior to the September 18 or December 4 submission deadline for certified cases. This one-time test submission should ensure that cases will not be lost during offset processing due to errors that could have been corrected prior to the certified submission. The cases submitted will be processed through the OCSE Edit-Validation program, then forwarded to IRS for a test match on the Taxpayer Master File. Please submit all new cases from your State to ensure more accurate final submittals from your State. Furthermore, if the test tape results in new addresses from IRS, it will assist OCSE during the issuance of pre-offset notices. That is, it will minimize the time and effort that would otherwise be required in October.

States will receive a Test Tape Rejection Report which will indicate matching errors at IRS due to problems with the absent parent's name or SSN. Agencies may then correct their case records before submitting the certified (final) tape.

The total number of test cases and the total amount of arrearage should be provided with the submittal. The Test Tape may be submitted to OCSE from June 1 through July 10. No Test Tapes will be accepted after July 10 (see Exhibit B). Although States have until July 10 to submit the Test Tape to OCSE, it is strongly suggested that the tapes be submitted by June 19. This is because all cases OCSE receives by this date will be sent to IRS for processing during the week of June 22. States will receive the results and addresses during the first or second week

of July giving States more time to analyze results and correct errors for the final submittal. In addition, those States who issue their own notice will have more time to process the address information in order to issue notices. Cases submitted after June 19 will not be sent to IRS until the week of July 13th and the results will not be sent to the States until the week of July 27.

II. PRE-OFFSET NOTICE AND COMPLAINT PROCEDURES

A. PRE-OFFSET NOTICE

The State IV-D Agency, or OCSE at the State's request and if OCSE agrees, must send a written advance notice to individuals before referring their names to IRS for offset (see Exhibit C). The notice must inform absent parents of the following:

oThe right to contest the State's determination that past-due support is owed or the amount of past-due support submitted;

othe 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;

othe procedures and timeframe for contacting the IV-D Agency in the submitting State to request administrative review.

Additionally, IRS recommends that States include in their notice the following language: "If you are married, filing a joint income tax return, and you incurred this debt separately from your spouse, who has no legal responsibility for the debt and who has income and withholding and/or estimated tax payments, he or she may be entitled to receive his or her portion of the joint refund. If your spouse meets the criteria stated above, he or she may receive his or her portion of the joint refund by filing a Form 8379, Injured Spouse Claim and Allocation. Form 8379 should be attached to the top of the Form 1040 or 1040A when you file, or be filed according to other instructions as indicated on the Form 8379."

OCSE, at a State's request, will include the following language on the pre-offset notice: "The amount of this past-due support obligation may be reported to the credit bureau." This language may be requested by checking the appropriate section on EXHIBIT R. States which are not sure if they will be reporting to credit bureaus may want to consider having the phrase included anyway. In accordance with OCSE-IM-88-1 dated April 12, 1988 the State where the absent parent lives should submit to the credit bureau which may or may not be the State which is submitting the case for offset.

The pre-offset notice must include, in addition to the elements listed above, the arrearage amount which will be submitted to IRS

and a State or local address and telephone number for the taxpayer to contact if he/she desires to contest the offset or has any questions.

In order to ensure that all notices meet the requirements of 45 CFR 303.72(e), States electing to issue their own pre-offset notices must submit a copy to the OCSE Regional Office for review by July 30, 1992. OCSE will review the notice to see that it meets the above requirements. Pre-offset notices must be mailed by the end of October to give sufficient time for taxpayers to respond to the State agency. IV-D Directors must certify that notices for the prior processing year were mailed by the end of October and that notices for Processing Year (PY) 93 will be mailed by October 31. This certification should be forwarded to the OCSE Regional Office at the time of the review of the pre-offset notice. A copy of the notice and certification should also be sent to the OCSE Special Collections Unit.

States which choose to have the required pre-offset notice printed and mailed by OCSE will be charged for this service. OCSE charges include the costs of printing the notices, customized envelope, mail processing, and postage. Any fees charged the State are reimbursable at the current Federal matching rate for child support administrative expenses so that the Federal Government still bears the majority of the cost

(66 percent in Fiscal Year (FY) 92). For PY93, the cost for the service will be $.32 per notice. All States who elect to have OCSE issue the notices will be required to provide advance payment, based upon an estimated submittal caseload times the cost per notice. The procedures are as follows:

oStates requesting OCSE to issue their pre-offset notices are to furnish the information requested in EXHIBIT AA to OCSE by July 15, 1992.

oInformation provided should include an estimate of the number of cases which will be submitted for PY93 for offset. Even though it may be difficult for some States to offer an exact estimate, it is important that States give as accurate an estimate as possible in July. Remember to take into account any significant increase due to the requirement to submit all non-AFDC cases which meet the criteria for submittal.

oA check to reimburse OCSE for the service must be included with the form. (The dollar amount will be determined by the estimated number of cases to be

submitted times the cost per notice, $.30). The check should be made payable to the Office of Child Support Enforcement, and should cite appropriation number 7521536. For those States that require a Federal Tax I.D., the number is 53-019-6960. The CAN # is 21995207.

oOnce payment is received by OCSE, States will receive a letter of acknowledgment. States requiring an invoice or bill prior to making payment should contact OCSE.

oIf at the time of final tape submittal (September 18), it turns out that the State estimate was too low, the State must include a check for the balance due. If the estimated caseload is too high, resulting in an overpayment, the State will be issued a refund for the excess amount following the completion of the pre-offset notice mailing.

The State IV-D Agency may elect to use a State or local address and telephone number as the contact reference on the pre-offset notice mailed by OCSE (see EXHIBIT S). Local addresses may also be used as the return address on these pre-offset notices. However, if the State elects to have OCSE print a local contact, individual case submissions must contain local identification codes. This information must be submitted to OCSE, on magnetic tape in the format described in EXHIBIT D, by August 28.

(Please note that there is a change in the local address tape specifications for PY93).

IRS allows States the capability of using a local address and telephone number, as the contact reference on the offset notice. This enhancement expedites the response to absent parent inquiries and complaints. Irrespective of whether a local address or State address is used, there must be a reference to 'Child Support' or 'Family Support' in the address so as to distinguish the offset from the other Federal Agencies participating in the program. In addition, specific names of contact persons should not be used. Instead, the State may wish to use a title such as Offset Coordinator. States must not use 'IRS' in their address thus avoiding any misrepresentation to taxpayers. IRS will specify on the offset notice whether the case is an AFDC or non-AFDC case. This will appear just below the child support enforcement agency address. States are to notify OCSE by August 28, if a local address and telephone number is to be used for the IRS offset notice (see EXHIBIT R). If the State elects to have IRS print a local contact, individual case submissions must contain local identification codes which correspond to the FIPS codes. If during the processing year an address or phone number changes, States should notify OCSE in writing of the change. OCSE will report this change to IRS so their offset notice will reflect the correct information.

Again this year, IRS is requiring each State to certify that all addresses and phone numbers have been verified. This form (see EXHIBIT X) must be returned by each State for both local and State address/phone verification by August 28. Maintaining

accurate address and telephone information is extremely important and it is imperative that States provide correct information.

B. COMPLAINT PROCEDURES

An essential element of the offset process is the opportunity afforded absent parents to contest the offsetting of all or any portion of their refund. Since the complaint procedures vary somewhat between interstate and intrastate cases, they will be treated separately. Complaint procedures are the same for assigned arrears and non-AFDC arrears.

1. PROCEDURES FOR CONTESTING IN INTRASTATE CASES

Upon receipt of a complaint from an absent parent in response to the advance notice or concerning a tax refund which has already been offset, the State must review its submittal and attempt to resolve the complaint. If the taxpayer requests an administrative review 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. 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.

If the administrative review results in a deletion of, or decrease in, the amount referred for offset, the IV-D Agency must notify OCSE using the procedures for reporting updates. Timeframes for reporting updates are dependent upon when the administrative review is conducted. If the review occurs prior to January 10, the update should be reported during the State's normally scheduled update process. If, however, the review occurs after January 10 and results in a deletion or modification, the update must be reported to OCSE within 10 work days of the administrative review. (See EXHIBIT N for Tape Submission Requirements.) 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, and report to OCSE a State payment. In joint return cases, the refund check should be payable to both parties. IRS will provide both taxpayers' names on the monthly collection reports in cases involving joint returns.

2. PROCEDURES FOR CONTESTING IN INTERSTATE CASES

In compliance with 45 CFR 303.72 (g)(2), if the absent parent requests an administrative review in the submitting State, the IV-D Agency must follow the same procedures set forth above for intrastate cases. In particular, the submitting State should review its computation of the arrearage submitted for offset and the underlying documentation, any new evidence provided by the

absent parent, and attempt to resolve the complaint if possible.

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 that State and provide all necessary information (including a copy of the order and any modifications, a copy of the payment record or the custodial parent's affidavit, and the custodial parent's address for a non-AFDC case) within 10 days of the absent parent's request for an administrative review. States should use the interstate transmittal form to refer a case to the State with the order to conduct an administrative review. (See EXHIBIT U.)

At the same time the submitting State must send OCSE an update to report that the case is being transferred to the State with the order for the purpose of conducting an administrative review. When reporting the transfer to OCSE, the submitting State must also indicate to which State the case is being transferred. States must report this transfer one of three ways. If the volume of transfers is considerable, we encourage States to report on tape using the format in EXHIBIT N, or via your personal computer. (See EXHIBIT Z for details on updating cases by PCs.) States may also update using MITRONS. (See EXHIBIT CC.) When this update is received, OCSE will generate an update request form to be forwarded to the State with the order. (See EXHIBIT V.) This form contains case data from submitting State, i.e., SSN, local code, case number, and original arrearage, so that the State with the order can easily submit a deletion or modification via PC, tape, or MITRON, based upon the outcome of the administrative review. Further explanation of this form is provided in the update section.

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; and the State must conduct the review and make a decision within 45 days of receipt of the notice and information from the submitting State. The decision should be based upon the accuracy of the arrears and whether or not it is legally enforceable under State law. If the State conducting the review is not the State which submitted the case for offset, it is not appropriate to base the review on policy

considerations, i.e., whether the State with the order would have submitted the case for offset under its procedures.

If the administrative review results in a deletion of, or decrease in, the amount referred for offset, the State with the order must notify OCSE within the same timeframes set-out for intrastate cases. Again, States are encouraged to use PCs in order to expedite reporting of updates. OCSE will also notify the submitting State when the State with the order has deleted or modified a case due to an administrative review. If the offset has already occurred, the State with the order must notify the submitting State of its decision, and the IV-D Agency in the

submitting State must take steps to refund any excess amount offset to the absent parent promptly. The State may not delay refunds of excess amounts withheld pending receipt of the offset from the IRS. When an administrative review is conducted in the State with the order, the submitting State is bound by the decision made by that State. Please note, however, that if the submittal is based upon orders from two States, the reviewing State should only verify the arrearage which accrued under its order. Such submittals will usually require two separate administrative reviews if the taxpayer challenges the entire submittal. And, as in intrastate cases, refunds in joint return cases should be payable to both parties.

In computing incentives, if the case is referred to the State with the order for an administrative review, 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. When a collection is received for a case which has been transferred to the State with the order for the purpose of an administrative review, OCSE will report the offset to both States. If at a later date there is an adjustment on a transferred case, the adjustment will be reported to both States. The submitting State is liable to IRS for any adjustments and both States will have to reflect such adjustments when reporting collections to OCSE. The report issued to the State with the order (transfer State) will be in hard copy and will be in addition to the monthly collection report. (See narrative description of major reports.)

3.GUIDELINES FOR SOCIAL SECURITY NUMBER ERROR PROBLEMS

To achieve uniformity and to ensure that the proper procedures are followed in any case in which there is a discrepancy in the identification of the taxpayer certified for offset and/or the taxpayer actually offset, due to an SSN error, IRS has worked with OCSE to develop the following guidelines for the State to follow in what was determined to be the three most common situations.

SITUATION 1:

If the State simply identifies the wrong SSN for an individual, the State should make a prompt refund to the taxpayer, delete the case, and report a State payment to OCSE. For example, William Green, SSN 222-33-4444 was submitted instead of the actual absent parent William Green whose SSN is 888-99-7777. In this instance the wrong SSN has been identified for the absent parent and the taxpayer being offset is entitled to a prompt refund from the State.

SITUATION 2:

The second type occurs when a person (other than the obligor) files his/her return using another person's SSN (the obligor's).

One such example is when the State submits John Smith, SSN 333 22-5555 and his current spouse, Mary Smith, files her return separately using the IRS label mailed to John Smith. If Mary files her return prior to John, her refund will be offset because the IRS computer will read his label. Since the name on the label is the person submitted for offset, even though the return is for Mary Smith, IRS will forward her refund to the submitting State. In this situation, the State should not refund to the taxpayer but should refer Mary Smith to the IRS who must correct their records, adjust the State's collection, and make a refund to her.

Another example of this particular type of problem is very similar to the one above except, in this situation, it's a father/son relationship. If Jose Rodriques Jr. files using his father's SSN and is offset, but is not the absent parent, the State should not make a refund to him. Instead Jose Rodriques Jr. should be referred to IRS so his tax account can be updated correctly. Again, IRS would adjust the State's collection and refund to Jose Rodriques Jr. Then when Jose Rodriques Sr. files his refund, it can be offset.

SITUATION 3:

Occasionally two persons are assigned the same SSN by the Social Security Administration (SSA). If this is the situation, the first person filing his/her return will be offset. If, however, the person is not the obligor, the State should not make a refund to the taxpayer. Instead, the person should be referred to IRS who will assign a temporary filing number, credit the taxpayer's account with the refund, and have the person obtain a new SSN from SSA. An adjustment to the State's collection will be made by IRS and a refund will be made to the taxpayer thus correcting the offset. Consequently, when the obligor files his return, the refund will be eligible for offset.

III. UPDATES TO CASE SUBMISSIONS

OCSE has implemented a process whereby States are able to

transmit update case data to OCSE by using personal computers. A software program using a full screen data entry system has been developed which will allow States to enter deletes, modifications, transfers, and State payments on a PC to be transmitted to OCSE for processing. This should be particularly beneficial during weeks in which the volume of updates is low, thus eliminating the need to create a tape. OCSE strongly encourages States to use this method in order to expedite reporting. (See EXHIBIT Z for details regarding procedures and specifications for personal computers.)

States may also send tapes via a tape to tape transfer. The machines currently being used are MITRONS. For those States electing to use the MITRON, please refer to EXHIBIT CC. It should be noted by the State that data requirements for tapes being submitted on the MITRON are different than those for tapes mailed to OCSE.

A. DELETIONS AND MODIFICATIONS

For both AFDC/foster care and non-AFDC cases, submittals received by September 18 can be updated for deletions or decreases in arrearage amounts from September 18 throughout the entire processing year. For December 4 submittals, updates will be accepted from December 11 throughout the processing year. Requests for case updates cannot be processed for the purpose of deleting or modifying amounts on the pre-offset notice. Updates received at OCSE by December 11 will be processed against the OCSE master file before forwarding the cases to be flagged for offset by IRS. As in the past, OCSE strongly urges that updates be submitted before OCSE sends the consolidated file to IRS for flagging. The extended December 4 submittal deadline only allows for State internal update processing prior to final submittal to OCSE. Early update submission (by December 11) assures case correction before cases are forwarded to IRS for potential flagging for offset.

Cases received after December 11 will be marked on the OCSE master file and forwarded to IRS on a weekly basis once the cases have been flagged on the IRS Master File. This means that effectively, cases received between December 11 and approximately January 21 will not be processed at IRS until after IRS has flagged the cases on the master file, which usually occurs towards the end of January. It is important that States recognize this time gap in processing. OCSE strongly encourages States to maintain a list or file of all updates referred to OCSE during this time. In the beginning of February OCSE will return a report to States indicating the results of the updates. This report should be matched against the list or file maintained at the State to ensure that all updates were successful. It should not be assumed that because the case was deleted or modified on the State's records or system, that the update was successful at IRS. Furthermore, problems occasionally occur in that OCSE does not receive an update tape from the State for one reason or another. Here again, it is imperative that each State monitors what updates have been forwarded to OCSE to ensure processing. Such quality control of cases should continue throughout the entire processing year.

To assist States' efforts to monitor update processing, a brief summary of the processing schedule is provided. Beginning at the end of January, every Tuesday, OCSE creates a weekly update tape to send to IRS. These updates are processed at IRS over the weekend. The results of IRS processing are usually received at OCSE on Tuesday or Wednesday and processed by us the next day. On the following day OCSE mails the update results to each State. At this time the State should make sure that the number of cases sent to OCSE matches the results received. Also, for States that

MITRON tapes, we suggest that you keep the input tape and the MITRON report which indicates if the transmission is successful until results on those cases are received from OCSE. (See EXHIBIT I.)

Each State should be reminded again that IRS does not accept duplicate transaction types per case within the same weekly batch. In other words, if the State reports two modifications for a case in the same batch, IRS will accept only the first modification rejecting the second. If, however, a taxpayer has been submitted for both an AFDC arrearage and a non-AFDC arrearage there is no problem in updating both cases in the same batch. OCSE will edit the data prior to referral to IRS. If duplicate modifications are submitted for the same case, OCSE will accept the lowest modification. If, however, duplicate State payments are submitted, the first one will be accepted with the duplicate being rejected.

Update transactions can be fully effective only if they are submitted to IRS prior to the processing of the individual's tax return. Therefore, it is vital to the success of the offset process that States submit updates as early and as frequently as possible. OCSE will forward updates on a weekly basis to IRS for processing.

States should not submit modifications/deletions as the result of an offset from the IRS. The arrearage amount is automatically decreased by the offset amount at the time of offset. A modification in this case would, in effect, reduce the arrearage amount of the offset.

It is important to point out that in all cases where a taxpayer has requested an administrative review, regulations require that an update must be submitted if the review results in a deletion of, or decrease in, the amount referred for offset. Timeframes for reporting updates are dependent upon when the administrative review is conducted. If the review occurs prior to January 10, the update should be reported during the State's normally scheduled update process. If, however, the review occurs after January 10 and results in a deletion or modification, the update must be reported to OCSE within 10 work days of the administrative review. The mandatory update following the administrative review is required regardless of the magnitude of

the reduction in the amount referred for offset.

For cases where there has been no request for an administrative review, States are required to notify OCSE of any decrease in or elimination of an amount referred for collection by Federal tax refund offset if the decrease is significant according to State guidelines. If an administrative review has been conducted, any deletions or decreases must be reported to OCSE.

Updates must be submitted either on magnetic tape or, through a personal computer. If a State does not have the capability of

creating a tape for updates, a PC must be used. Use the record format specified in EXHIBIT N. Position 73 reflects transaction type i.e., D,S,M,L or T. Transaction type L may be used by submitting States to change the local code on a certain case throughout the year should the need arise. The submission must include a signed request for update of transmittal (see EXHIBIT E) clearly labeled "STATE UPDATES TO TAX OFFSET." Also, each record must indicate whether it is an AFDC/foster care or a non-AFDC case. Each individual update case must also be identified by processing year. Updates should be mailed to the same address as the original submission. (See EXHIBIT B for shipping and handling instructions.) If MITRON tape transmission is used, please see EXHIBIT CC.

B. UPDATE REPORTING BY TRANSFER STATE

Interstate cases involve a slightly different procedure due to the nature of their complaint process. If the submitting State's attempt to resolve the complaint by reviewing its records and checking the computation of the arrears is unsuccessful, the absent parent has the right to have an administrative review conducted by the State in which the order was issued. For example, State A submits a case which is based on an order in State B. The absent parent, as a result of the pre-offset notice contests the referral for offset. State A reviews the documentation for the submittal and additional evidence provided by the absent parent, but cannot resolve the matter and, at the absent parent's request, forwards the case and all pertinent information to State B within the regulated time for an administrative review. At the time State A forwards the case data to State B, State A must also notify OCSE of the transfer using the update procedure and designating the case with a 'T' for transfer. (See EXHIBIT N for reporting on tape and EXHIBIT W for reporting manually.) Also, the submitting State (State A) must designate the State to which the case is being transferred (State B). If the appropriate local code for State B is known, it should be provided when notifying OCSE of the transfer. Upon receipt of the 'T' updates, OCSE will process the cases with

their weekly update runs and forward to State B an update request form. States are encouraged to use the normal update reporting procedures, i.e., personal computer or magnetic tape to report deletion or modification on cases submitted by another State. When the update is completed, OCSE will report the results to the State with the order as well as report accepted updates to the State which initially submitted the case.

C. STATE PAYMENTS (REFUNDS)

The procedures for reporting State payments (refunds to taxpayers) will remain automated. Each State will send to OCSE, on a weekly basis, a report of every refund the State makes to an absent parent for any case submitted for tax refund offset. Offsets distributed to the custodial parent are NOT to be reported as State payments. The States are to use the same

format used in issuing updates (See EXHIBIT N) using code 'S' for "State payment."

States can continue submitting State payments past the deadline of December 11. States are nevertheless encouraged to submit State payment reports to OCSE as expediently as possible. This enhancement should be of considerable benefit since an Injured Spouse Claim and Allocation can be filed for up to 6 years.

A State payment may be reported on any collection made from PY84 to present. We encourage States to report any payments not previously reported. When reporting a State payment, the processing year in which the original collection was made must be reported (see EXHIBIT N).

Still in effect is the State payment procedure to accept both upward and downward modifications of State payments. When reporting two or more State payments on a case due to additional money being returned to a taxpayer, or an incorrect amount on the first reporting, the correct amount of the payment should be reported. This is true whether a State is increasing or decreasing the amount of the payment. For example, if a State payment of $150 is reported on a case, and the State refunds the same taxpayer an additional $50 at a later date, the State should then report a State payment of $200. If on the other hand, the State reports a payment of $250, but only actually refunded $25, the State should then report a State payment of $25.

IRS will indicate if the refund involves a joint return so that refund checks can be issued to both parties. In most cases, IRS will be providing the names for cases involving joint returns. However, if only the absent parent's name is provided, the refund check should be issued to "Mr. and Mrs.".

When the State is unable to locate an obligor for the purposes of returning excess amounts which have been offset, the State should send OCSE in writing specific case information, i.e., taxpayer name, SSN, amount to be returned to obligor, and a brief explanation of the State's efforts to locate the absent parent. OCSE will forward the information to IRS. At this point IRS will research the individual case and provide the State with the most recent address for the taxpayer. Due to disclosure limitations IRS will no longer issue returns to the taxpayers for the State. As a cautionary note, this procedure is to be used on a limited basis, and only after diligent efforts have been made to locate the obligor. It is not a substitute procedure for States to use instead of making prompt refunds, but may be used for example when the taxpayer is deceased and/or locate leads have been exhausted. If money is still returned as undeliverable, States will need to set-up a fund to account for this.

IV. PROCESSING OFFSETS

A. OFFSET PROCESSING BY IRS

Upon receipt of all certified cases from OCSE, IRS will run the consolidated tape against the IRS taxpayer master file (which contains all primary tax filers) and against a cross reference file (which contains secondary tax filers). This will enable States to obtain an offset even though the absent parent may be listed as a secondary filer on the return. Cases are matched against the SSN and the first four letters of the surname. OCSE will be notified, and in turn will notify State IV-D agencies of any cases that do not match on the SSN or surname check. (See EXHIBIT K.) Each time a match is made, IRS will freeze any potential refund which may become available during the processing year. Because a taxpayer can file returns for more than one tax year there is the possibility of multiple offsets in one processing year. The appropriate tax year for each offset will be identified.

For those cases which did not match, a further explanation of the errors follows:

oSSN NOT ON FILE - These cases did not match because the taxpayer has not filed a tax return within the last 4 years and thus is not on the master file. We recommend that you continue to submit these cases for offset. Only the delinquency amount need be verified prior to certification next year as there is no reason to presume that the name or Social Security Number is incorrect. It should be noted that IRS will not flag a case for offset if that individual's spouse has already been submitted by another Federal Agency (e.g., Department of Education), and that agency has a higher priority than the non-AFDC child support debt. This is not a new practice. IRS will not identify cases in which a spouse has been submitted for offset because of its confidentiality rules, but will report them as "SSN Not on File." These cases should be resubmitted next year.

oNAME DOES NOT AGREE - These cases, though they successfully passed the SSA file, did not match because the name which was submitted did not exactly match the name on the IRS master file. In most instances the IRS name will be one letter different from the State name. In some instances the name may have changed altogether (e.g., marriage). For these cases we are returning the first four letters of the name which IRS maintains. We suggest that you research and verify the discrepancy and when appropriate resubmit using the IRS name.

oINVALID COMBINATION OF NAME AND SSN - These cases, when processed by IRS against the SSA validation file, did not

match because the name submitted by the State was different than any name contained on the SSA file for that SSN, e.g., 'Smith' rather than 'Johnson'. These cases should be scrutinized to determine whether the Social Security Number or name was keyed correctly. For example, a name submitted as 'Christman' instead of 'Cristman' would not match since three of the first four letters are not in the correct position. Also included in this error code, are cases which were rejected for other reasons such as an account being reviewed by IRS, bankruptcy, etc., but for disclosure reasons IRS will not tell us which ones these are or what the reason is. Therefore, if you are confident that you have the correct name and SSN, we encourage you to resubmit next year.

IRS will run the OCSE tape against the IRS taxpayer master file during the first IRS processing cycle of the calendar year. An offset notice (See EXHIBIT F) will be issued by IRS after each tax return is processed. The IRS Notice of Offset states that IRS has retained all or part of a tax refund for full or partial satisfaction of a past-due support obligation.

The notification will advise the absent parent to contact the appropriate State agency to correct any errors or to obtain answers to any other questions. A copy of the IRS notice is contained in the Attachment. The offset notice will contain the SSN of both the primary and secondary tax filers. Please note that this notice will be received by the absent parent before the State receives notification of the offset. States must respond to taxpayer complaints and develop specific procedures for promptly refunding any money incorrectly offset whether the collection has been received from IRS or not.

OCSE will prepare a report showing the address on the tax return and mail the report to the individual States. The address report is combined with the monthly collection report.

The IRS will collect a refund from a joint income tax return to offset a past-due support obligation if either tax filer is certified as being legally responsible for providing support. State IV-D agencies are to refer complaints or questions concerning joint refund cases directly to IRS. If the non-obligated spouse is not liable for the support debt, IRS will issue a pro rata refund to the spouse (upon the filing of an Injured Spouse Claim and Allocation) and the State will be required to reimburse IRS. IRS encourages the filing of a form 8379, Injured Spouse Claim and Allocation at the time of filing. Form 8379 should be attached to the top of the Form 1040 or 1040A, or be filed according to other instructions as indicated on the Form 8379. This will permit IRS to make direct refunds to the spouse and thus avoid adjustments to the State. States and OCSE will be advised by IRS of any adjustments to State collections that are required.

B. PROCESSING MONIES THAT HAVE BEEN OFFSET

The distribution of monies to States is done through a procedure that was implemented to improve the efficiency of Federal financial management and to benefit the State Agencies. This procedure is the use of Electronic Funds Transfer to make Federal Tax Refund Offset payments to the State. All payments are now made through the Treasury Financial Communications System (TFCS). The TFCS provides on-line access to the Federal Reserve Communications System (FRCS), enabling payments to be made to financial institutions that have access to the TFCS. Payments can also be made to institutions that do not have access to the TFCS through correspondent financial institutions or Federal Reserve Banks. The TFCS payment method eliminates mail and processing time associated with payment by check. The State will receive payment for the previous month's offset collections, on the fifth work-day of the month. Each TFCS payment message will contain the appropriate account number. To ensure that TFCS payments are directed to the correct financial institution and contain the correct contact information, we are requesting that the form EXHIBIT BB be returned to OCSE by August 28. Also, if the bank name or address or the financial institution's ABA routing number should change any time during the year, please notify the Special Collections Unit at (202) 401-9389 as soon as possible.

C. DISTRIBUTION OF COLLECTIONS FROM OFFSETS

Past-due support amounts collected as a result of the offset procedure shall be distributed in accordance with section 457(b)(4) and (d)(3) of the Social Security Act and 45 CFR 303.72(h). These sections provide that such amounts collected must be used first to satisfy past unreimbursed assistance payments, or be paid to the family or used for the benefit of the child in foster care cases if unreimbursed assistance payments have been paid. In accordance with the Program Standards Regulation effective October 1990, collections as a result of tax refund offset must be distributed to the AFDC family or IV-E Agency if appropriate, or the non-AFDC family within 30 calendar days of the date of receipt in the IV-D Agency unless State law requires a post-offset appeal process and an appeal is filed on-time. If an offset is made to satisfy non-AFDC past-due support from a refund based upon 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 6 months from notification of offset, whichever is earlier.

The IRS Service Fee is deducted from the collections of refunds offset for past-due child support. The State should be reminded that although the amount received by the State will be the collection less the IRS fee, the States must distribute and credit the obligor for the full amount of money offset. States

will receive a monthly accounting of the fee amount withheld. (See EXHIBIT G.) As found in (53 FR 12041), this allows OCSE regulations to conform with the cost recovery method of IRS.

Each State must develop specific procedures for distribution of collections as well as procedures for the prompt refund of any incorrect offset amounts.

If both assigned and unassigned arrears are submitted for offset, the assigned arrears will be offset before any payment can be made to the family. This priority is required by the Internal Revenue Code (26 USC 6402(c)) and applies in all cases regardless of the amount or the timing of the submittals. Other debts owed to the Federal Government and submitted for offset will similarly be paid before any unassigned arrears can be offset.

Any monies collected by the State through the tax refund offset process can only be applied to the original arrearage amount which was certified. That amount is the debt which was claimed in the pre-offset notice. Arrearage amounts accumulated after the certification for IRS tax refund intercept may not be satisfied by offset of the income tax refund. This is because the taxpayer will not have received any notice and consequently will not have had any opportunity to contest the offset of these added amounts. Thus, if an absent parent satisfies a portion of the amount of past-due child support indicated in the pre-offset notice, no subsequent arrearage accrued can be offset by the tax refund intercept process. For example, John Smith is certified for $1,000. Upon receipt of the pre-offset notice, Mr. Smith pays $500, in addition to his current support obligation, thereby reducing the amount that can be satisfied by a tax refund offset. However, during the interim between this payment and actual tax refund offset, Mr. Smith falls into arrears for another $500, thus bringing his total arrearage amount back up to $1,000. Nevertheless, only $500 of any tax refund which is due can be used to satisfy the past-due support obligation, since the subsequent $500 arrearage accrued following the issuance of the debt certification and the notice to the taxpayer.

In effect, arrearages in child support obligations that accumulate after issuance of the debt certification and pre-offset notice may not be satisfied under the current year tax refund offset process. In the event that the obligor reduces the original arrearage amount, and the offset exceeds this lower amount, the excess is to be returned to the taxpayer. This, of course, does not preclude the State from negotiating with the absent parent to apply excess amounts offset for satisfaction of any additional arrearage owed or from collecting such debts using other remedies that may be available under State law. These negotiations, if any, may not be used to circumvent the requirement that States must promptly refund excess amounts which

are offset.

D.PROCESSING OFFSETS FOR CASES SUBMITTED BY TWO OR MORE STATES

When the same SSN is submitted by more than one State, OCSE will designate the State that submitted the case first as having first priority of offset. Subsequent submissions for offset of the same tax refund will be given priority based upon the amount of the arrearage (highest to lowest). During the IRS offset process, if the tax refund is greater than the amount owed to the first State, the balance will be used to satisfy the debt owed to the remaining States until the refund is exhausted or all debts are satisfied. Any remaining amount will be paid to the taxpayer. However, as noted above, an assigned arrears claim takes priority over a non-AFDC claim even if the latter claim was submitted first.

E. ADJUSTMENTS TO COLLECTIONS

If an offset for delinquent support is made against a joint tax refund, the non-obligated spouse may file a request for an Injured Spouse Claim and Allocation of a joint return (Form 8379), with the IRS to recoup his or her portion of any refund due. IRS encourages the injured spouses to file the amended returns at the time the original tax return is filed. Doing so will preclude the need for an IRS adjustment. Mention of the simultaneous filing of the Form 8379 is made in the OCSE pre-offset notice. In some community property States the entire refund may be intercepted to pay either spouse's debt. If the spouse is entitled to a share of the refund, the IRS will pay the non-obligated spouse directly. When this occurs, IRS will send the obligated spouse a shortened version of the offset notice (see Exhibit F1). This shortened notice should assist States in determining whether the injured spouse filed a Form 8379 with the 1040 and already received his/her portion. If the amended return is filed after the original return, IRS will notify the State (through OCSE) and the State must reimburse IRS. The exact method of the reimbursement of IRS will depend upon the total collections made for the State during the month in which the adjustment for the amended return was made.

In addition to adjustments due to amended returns, there may be adjustments to collections made by IRS in cases where the wrong taxpayer was offset due to an error in the SSN or name. Furthermore, if the State submits a case that is protected by an automatic stay under bankruptcy proceedings, and there is an offset, IRS will make a reversal on that case at a later date.

Prior year adjustments for spousal claims will be reported under the current year accounting procedures. However, these adjustments will be identified as prior year claims so that the appropriate collection record can be identified and updated.

Beginning in processing year 1988, the time period for filing an Injured Spouse Claim and Allocation was extended to 6 years (28 USC Section 2401). Therefore, there will now exist the

possibility of States receiving adjustments to offset cases for up to 6 years. This includes adjustments for all cases within the past 6 years i.e., the 6-year period is retroactive. It is in part because of this that IRS is suggesting that injured spouses file the Injured Spouse Claim and Allocation Form 8379 at the time of original return filing. OCSE has included language to this effect in their pre-offset notices. States issuing their own notices should do likewise. (See EXHIBIT C.) Following the processing of amended tax returns and payment by the IRS, it will be necessary to make certain adjustments to the overall State collections and individual case records at the Federal and State levels.

V. IRS SERVICE FEE STATEMENT AND ADJUSTMENT BILLING

The IRS fee is directly deducted from the collections. OCSE will issue monthly statements detailing the amount of money deducted from the monthly collection reports for the IRS fee. (See EXHIBIT G.)

During the last few months of the processing year, many States' adjustments exceed collections resulting in a "negative collection transfer." When this occurs, OCSE issues the State a bill to be paid to the Fresno Service Center. (See EXHIBIT Q.) This bill is included with the monthly collection report issued to the State. Overdue payments to IRS (60 days past the invoice date) will be collected by deducting the amount of the past-due payment from future collections. IRS will also charge interest

on all late payments, at a rate prescribed in the Treasury Fiscal Requirements Manual (1 TFRM 6-8020.20). Therefore, States are strongly encouraged to make prompt payment to IRS, thus avoiding the possibility of being charged interest on the delinquency.

VI. INQUIRIES TO OCSE

State agencies are encouraged to call OCSE directly with any questions or problems that arise concerning the Tax Refund Offset Program. State and local agencies should not, however, refer individuals to OCSE. Also, on those occasions when questions arise concerning IRS action, State agencies are to contact OCSE and not the IRS Service Center. On joint return cases where the non-obligated spouse is seeking a partial refund, the non- obligated spouse should be referred to IRS. As in the past, State inquiries should be directed to OCSE Regional Representatives or to the OCSE Special Collections Unit at

(202) 401-9389, 4th Floor, 370 L'Enfant Promenade, S.W., Washington, DC 20447.

VII. INQUIRIES TO STATES

The State contact for the Federal Tax Refund Offset Program continues to change each year. To keep an updated listing please fill out EXHIBIT M and return it to our office by August 28.

VIII. REPORTING

OCSE will provide explanatory reports on all phases of program operations with sufficient information to allow the State agency to take appropriate action. All State reports will include both AFDC and non-AFDC cases, sorted by local code and SSN. All reports issued by OCSE will contain a case type indicator for each record.

IX. SECURITY AND SAFEGUARDING REQUIREMENTS

The Internal Revenue Code was amended effective December 31, 1985, to add a new section, 26 USC 6103(l)(11), pertaining to disclosure of information obtained by State agencies under the tax refund offset program. In general, this law provides that tax return information so obtained can only be used in "establishing appropriate agency records or in the defense of any litigation or administrative procedure ensuing from a reduction made under section 6402(c)." In addition, changes were made to section 6103(p)(4) of the IRC regarding safeguarding of information obtained through the tax refund offset process. Magnetic tapes and hard copy transmittals of tax return information obtained through OCSE must be protected from unlawful use or disclosure in accordance with these guidelines.

X. QUALITY CONTROL

When submitting tapes or transmitting data via the PC, it is imperative that States take appropriate measures to ensure quality control. Before data is forwarded to OCSE, it should be reviewed to make sure the data is formatted correctly and that accurate information is sent. Such reviews should occur any time data is forwarded to OCSE and particularly at the time of the final submittal tapes. For final submittal tapes, States should check for such things as: all counties have been accounted for, there are both AFDC cases as well as non-AFDC cases, the number cases is accurate, and case information is correctly formatted, etc.

XI. DATA TRANSMISSION METHODS

l. Mailing of tapes - This has been widely used for many years and still remains a preferred method for extremely large volumes of data (100,000 or more cases) and/or when requirements (equipment, software, trained staff) for other methods are not available in the State. However, for OCSE, this method is extremely labor intensive, especially if tapes must be recycled. For this reason, we are encouraging States to explore other methods of forwarding and receiving data. Furthermore, unless States send tapes via express mail, there is a built in delay before the data can be processed. OCSE will continue the policy of not returning user tapes. In exchange, OCSE will not require its tapes to be returned. This is an effort to reduce personnel

resources required for handling tapes. All unreturned tapes must be cleaned and degaussed to prevent any unauthorized usage of data.

2. MITRON - A tape-to-tape data transmission system that derives its name from its manufacturer. It consists of a tape drive, main unit, and software to make it work. In order to use this method of data transfer, both the sending and receiving stations must have MITRON equipment and special software. This method is capable of handling a large volume of data. Best results are obtained when processing moderate to large (5,000 to 100,000 cases) volumes of data; however, it is limited to one reel of tape. The advantages include the elimination of the delay caused by the mailing of tapes and next day processing by the data center. Currently, procedures exist which allow States to transmit data to OCSE and receive the return information on MITRON.

3. On-line Data Entry - Direct access to the OCSE mainframe via a PC with modem. This method is appropriate for small volumes of data (100 cases or less) and allows for immediate processing by the OCSE mainframe. States currently use this method to submit updates for the Tax Refund Offset Program. If a State wishes to begin using on-line data entry, please contact the Special Collections Unit on (202) 401-9389. States will be requested to submit a "Computer User's Guide to Good Security Practices" (see Exhibit Z). The Special Collections Unit will provide the State with any information and/or software they will need. (See Exhibit Z.)

4. File Transfer - Electronic transfer of files between a personal computer (PC) and the mainframe. This method supports a large volume of data; however it is best suited for small to moderate (100 to 5,000 cases) amounts of data. Its advantages are the elimination of tapes and their associated problems, and direct transfer of data from State to OCSE and vice versa. It should be noted that if the State intends to upload or download data, it will need a copy of the SIMPC communications software. (See Exhibit Z.) One copy of SIMPC is available to each State that would like to use this method of data transfer. Please call the Tax Refund Offset Unit to obtain a copy of the software. If a State is currently unable to download and upload to its own mainframe, then file transfer is most appropriately applied to data that originates from a PC. Thus, file transfer may be a better solution in FPLS processing than for Tax Refund Offset.

5.On-Line Query - This year a new option has been added

to enable States to query cases submitted by their State to see if a collection has been made, an update processed, or to just review the case. (See Exhibit Z.)

SCHEDULE FOR 1993 PROCESSING YEAR

JUNE 1 - JULY 10 -TEST TAPE SUBMITTAL PERIOD

JUNE 19 -ALTHOUGH STATES HAVE UNTIL JULY 10 TO SUBMIT THE TEST TAPE TO OCSE, WE STRONGLY SUGGEST THAT WE RECEIVE THE TAPES BY JUNE 19. THIS IS BECAUSE ALL CASES OCSE RECEIVES BY THIS DATE WILL BE SENT TO IRS FOR PROCESSING DURING THE WEEK OF JUNE 22. STATES WILL RECEIVE THE RESULTS AND ADDRESSES DURING THE FIRST OR SECOND WEEK OF JULY GIVING STATES MORE TIME TO ANALYZE RESULTS AND CORRECT ERRORS FOR THE FINAL SUBMITTAL. IN ADDITION, THOSE STATES WHO ISSUE THEIR OWN NOTICE WILL HAVE MORE TIME TO PROCESS THE ADDRESS INFORMATION IN ORDER TO ISSUE NOTICES.

JULY 15 -CUT-OFF DATE TO RECEIVE MONIES FOR PRE-OFFSET NOTICES ISSUED BY OCSE BASED ON ESTIMATED CASELOAD.

REVIEW OF PRE-OFFSET NOTICE BY REGIONAL OFFICES. IV-D DIRECTOR'S CERTIFICATION REGARDING PRE-OFFSET NOTICES DUE TO REGIONAL OFFICES.

AUGUST 24 -EARLIEST DATE FOR SUBMITTING 1993 FINAL SUBMITTAL TAPES TO OCSE.

AUGUST 28 -STATES TO PROVIDE INFORMATION FOR OFFSET NOTICE. EXHIBITS R, S, M AND X.

STATES TO PROVIDE INFORMATION FOR ELECTRONIC FUND TRANSFERS. EXHIBIT BB.

LOCAL ADDRESS TAPES DUE TO OCSE.

EXHIBIT X CERTIFICATION MUST BE INCLUDED. **PLEASE NOTE THAT THERE WILL BE A CHANGE IN THE LOCAL ADDRESS TAPE SPECIFICATIONS FOR PY93.**

SEPTEMBER 18-FINAL SUBMITTAL TAPES FOR 1993 DUE FROM STATES THAT HAVE OCSE ISSUE PRE-OFFSET NOTICE. **THIS DATE CANNOT BE EXTENDED BECAUSE OCSE MUST SUBMIT CASES TO IRS FOR ADDRESSES ACCORDING TO AN IRS SCHEDULE.**

SEPTEMBER 21- -PROCESSING YEAR (PY) 93 PRE-OFFSET NOTICES

OCTOBER 31MAILED BY OCSE, (NOTICES MUST BE MAILED BYOCTOBER 31). **AGAIN, THIS IS A SHORT TIMEFRAME TO PROCESS AND MAIL ABOUT 2 MILLION NOTICES, SO PLEASE REVIEW ALL TAPES FOR ACCURACY BEFORE SUBMITTAL**

OCTOBER-DECEMBER 11 -PHASE 1 FOR PY93 UPDATES (PROCESSED AGAINST OCSE MASTER FILE BEFORE FINAL REFERRAL TO IRS). **PLEASE REMEMBER THAT STATES WHO SUBMIT DECEMBER 4 SHOULD NOT BE SENDING IN UPDATES SINCE WE HAVE NO MASTER FILE OF CASES TO PROCESS THESE UPDATES AGAINST. STATES WHO CHOOSE THE LATER SUBMITTAL DATE ARE RESPONSIBLE FOR PROCESSING ALL UPDATES INHOUSE BEFORE THE FINAL SUBMITTAL TAPE IS SENT TO OCSE.

DECEMBER 4 -PY93 FINAL SUBMITTAL TAPES DUE FROM STATES

ISSUING OWN PRE-OFFSET NOTICE.

DECEMBER 14-PHASE II FOR PY93 UPDATES (WILL BE PROCESSED AGAINST IRS DEBTOR MASTER FILE). **PLEASE REMEMBER THAT NO PROCESSING IS DONE AT IRS FROM APPROXIMATELY THE SECOND WEEK IN DECEMBER UNTIL APPROXIMATELY THE THIRD WEEK IN JANUARY. CASES SENT FOR UPDATE DURING THIS TIME ARE HELD BY OCSE UNTIL THE FIRST UPDATE AT IRS IN LATE JANUARY. STATES SHOULD BE TRACKING ALL UPDATES FORWARDED TO OCSE DURING THE TIME, BECAUSE THE RESULTS WILL BE CONSOLIDATED INTO ONE REPORT TO THE STATE**

CUT-OFF DATE FOR REPORTING MODIFICATIONS/DELETIONS FOR CURRENT PROCESSING YEAR. NO CUTOFF DATE FOR STATE PAYMENTS

WEEK OF DECEMBER 14 -OCSE CERTIFICATION TAPE DUE TO IRS.

DECEMBER 18 -CUT-OFF DATE FOR REPORTING PROCESSING YEAR 1992 MODIFICATIONS/DELETIONS FOR CURRENT PROCESSING YEAR. NO CUT-OFF FOR STATE PAYMENTS - HOWEVER THESE TOO WILL BE HELD UNTIL FURTHER PROCESSING IN JANUARY.

JANUARY-3RD WEEK-IRS FLAGS CASES FOR POTENTIAL OFFSET. FIRST UPDATE FOR CASES ACCEPTED BY IRS (THOSE THAT HAVE BEEN HELD SINCE DECEMBER 14).

FEBRUARY - DECEMBER -MONTHLY COLLECTION REPORTS TO STATES.

The following is a narrative description of the major reports.

1. Test Tape Report

Purpose -This report is produced in two parts as a result of a Test Tape processing. Part I will contain systems errors e.g., invalid SSN, name, State Code, and arrearage. Part II will show records not matched on SSN and/or name on the IRS taxpayer master file. The errors may be corrected by the State Agency and included in the certified (final) submittal.

Schedule -Reports will be produced during June and July.

2. Certified (Final) Submittal Edit/Validation Report

Purpose -This report is produced as a result of a State Certified tape being run through OCSE edit processing program. The report provides individual error messages and summary statistics.

Schedule -Reports will be produced during October and November and mailed directly to the requesting State IV-D Agency. (See EXHIBIT H for tape specifications.)

3. Modification/Deletion/State Payment Report

Purpose -This report is produced in two parts, the first part provides individual error messages of unsuccessful update attempts and the second provides an audit trail of successful modifications, deletes and/or State payments. Modification and deletes processed after December 11 may be reported as successful against the Master File, however, the tax return may have been processed prior to receipt of the update. (See EXHIBIT I for tape specifications.)

Schedule -Reports will be produced during the update cycle, from November 1 throughout the processing year.

4.Modification/Deletion Report to Transfer State

Purpose -This report will be issued to the Transfer State. The cases included on this report can be either cases that have been transferred for administrative review, but are being UPDATED BY the submitting State; or cases that have been transferred for administrative review and are being updated by the transfer State. (Hard copy only.) Also all successful updates submitted by the Transfer State

will be reported to the State which originally submitted the case.

Schedule -Reports will be produced during the update cycle, from November 1 throughout the processing year.

5.Certification Report

Purpose -This report is produced as a result of the IRS Certification run. The report will show a detailed listing of all cases matching the IRS Master File. These cases have been flagged by IRS for potential offset. (See EXHIBIT J for tape specifications.)

Schedule -This report will be produced after the IRS master file is flagged. This flagging activity should occur during the 3rd or 4th week of January.

The report will be provided to the State during the latter part of February.

6.Unaccountable Report (No Match)

Purpose -This report is to provide the IV-D agency with a list of cases not matching the IRS master file. (See EXHIBIT K for tape specifications.)

Schedule -This report will be produced upon receipt of the unmatched file from IRS. This activity should occur during the 4th week of January.

7.Address/Collection/Adjustment Report

Purpose-This is to report all offset cases with the dollar amount collected. This report will be used by the IV-D agency to reconcile and distribute monies received from the Public Health Service. This report will also be used by States for billing purposes as a detailed listing of cases offset. This Report also provides the current tax filing address for the cases offset. (See EXHIBIT L tape specifications.)

Schedule-The report is to be produced monthly from the time of the initial IRS offset through the last IRS processing cycle (approximately February through December).

8.Collection/Adjustment Report to Transfer State

Purpose-This is to report offsets made on cases which have been transferred to the State with the order for an administrative review. This

report should serve to assist States in determining whether they are entitled to incentives (hard copy).

Schedule-The report is to be produced monthly from the time of the initial IRS offset.

9.Name Change Report

Purpose-This report is to provide the IV-D Agency with a list of cases in which the name reported on the tax return form was not exactly the same as the name submitted by the State.

Schedule-The report is produced monthly in conjunction with the collection report.

EXHIBITS

EXHIBIT A: Transmittal Certification.....................34

EXHIBIT B: Submission Tape and Data Specifications.......35

EXHIBIT C: Pre-Offset Notice.............................38

EXHIBIT D:Pre-Offset Notice Local Contact Phone/

Address Tape Specifications...................39

EXHIBIT E: Request for Update of Transmittal.............41

EXHIBIT F: IRS Offset Notice.............................42

EXHIBIT G: Statement of Service Fee......................43

EXHIBIT H:Initial Submission Edit/Validation Tape Specification.................................44

EXHIBIT I: Update Edit Validation Tape Specification.....45

EXHIBIT J: Certification Tape Specification..............47

EXHIBIT K: Unaccountable Tape Specification..............48

EXHIBIT L: Combined Address/collection Tape

Specification ................................49

EXHIBIT M: Federal Tax Offset Phone Contact Form.........51

EXHIBIT N: Update Record Specifications..................52

EXHIBIT 0: Sample Coding for Last Names..................54

EXHIBIT P: IRS Addresses for Final Submittal Use

Tape Specifications...........................55

EXHIBIT Q: Negative Adjustment Billings..................57

EXHIBIT R:Notification of Issuance of Pre-Offset, Offset

Notice and Final Case Submittal...............58

EXHIBIT S:Contact Point for OCSE Issued

Pre-Offset Notice ............................59

EXHIBIT T:Non-AFDC Federal Tax Refund Offset

Information Form .............................60

EXHIBIT U:Child Support Enforcement Transmittal .......61

EXHIBIT V:Update Request Form...........................63

EXHIBIT W: Offset Notice Address or Phone Number Change..64

EXHIBIT X: Certification of local/State address/phone....65

EXHIBIT Y: FIPS PUB 6-3..................................66

EXHIBIT Z: Procedure For Use of Personal Computers.......67

EXHIBIT AA: Notice of Intention for Pre-Offset Notice.....75

EXHIBIT BB: Electric Fund Transfer Form ..................76

EXHIBIT CC: Magnetic Tape Data Transfer ..................78

EXHIBIT DD:FORM 8379 - INJURED SPOUSE CLAIM..............83

EXHIBIT A

TRANSMITTAL CERTIFICATION DATE

TO:OFFICE OF CHILD SUPPORT ENFORCEMENT DEPARTMENT OF HEALTH AND HUMAN SERVICES

370 L'Enfant Promenade, S.W.

Washington, D.C. 20447

FROM:State IV-D Director Name, title and jurisdiction

SUBJECT:Request for Collection of Delinquent Child and Spousal Support by the Internal Revenue Service through the Federal Tax Refund offset process.

I certify that every request for collection included with this transmittal meets the following requirements.

1.(A)The amount of the delinquency under a court or administrative order for child and spousal support is not less than $150.00 has been or will be delinquent for 3 months or longer as of January 1, and has been assigned to the State pursuant to section 402(a)(26) or 471(a)(17) of the Social Security Act.

(B)The amount of the delinquency under a court or administrative order for child support is not less than $500.00, and the State is enforcing the order under section 454(6) of the Act.

2.This agency has verified the accuracy of the arrears, has a copy of the order and any modifications, has a copy of the payment record or an affidavit signed by the custodial parent attesting to the amount of support owed and has, in non-AFDC cases, the custodial parent's current address.

3.The requests are in the form and contain all the necessary information required by the Internal Revenue Service and the Office of Child Support Enforcement and this information is true and correct.

4.This agency will mail pre-offset notices to the absent parents. YES NO

5.This agency certifies that the pre-offset notice issued to the absent parent meets the requirements set forth in regulations.

6.This Agency certifies that the address/phone information provided for the IRS offset notice has been verified.

Total number of AFDC requests Non-AFDC request Total amount of AFDC arrearages Non-AFDC arrearages Total number of magnetic reels

(The following is needed for each tape reel submitted for this certification)

Tape ## of Records Total Dollars

Signature of IV-D Director___________________________

Agency Contact

Phone Number

EXHIBIT B

Page 1 of 3

Submission/Test Tape and Data Specifications

STATES SUBMIT TO OCSE

Tape Submission Requirements

All magnetic tapes submitted by States to OCSE for certification to IRS for the Tax Refund Offset process must conform to the following specifications:

1. Media Heavy duty MYLAR magnetic

data tape.

2. Configuration IBM 9-track odd parity

3. Recording Density 1600 BPI

4. Labels (header,trailer) No Label (NL)

5. Record Size 80 characters (fixed)

6. Block Size 8,000

7. Data Code EBCDIC

Data Requirements

The minimum data elements which are required in order to match a tax return with a certification record are:

o Social Security Number o Local Code (Required

o Absent parent name if State uses Local

o Arrearage amount address information

o State abbreviation for offset notice)

o Case type indicator

In addition to the above requirements, the following data elements are optional for accounting and special processing:

o Local Code

o Case-number

Input Data Record Specifications

All data records are required to be in the following format.

(Records that deviate from the specified layout will NOT be forwarded to IRS).

Field Name Position Type Criteria

Submitting State 1-2 AlphaMust be valid FIPS 2 character alpha abbreviation for the State which initially submits the case for offset; must be constant throughout the file. Required. (See Exhibit Y - FIPS Pub 6-3)

EXHIBIT B

Page 2 of 3

Field NamePosition Type Criteria

Local Code 3-5NumericWhen used it must be three digit numeric local code. FIPS code is suggested (See Exhibit Y - FIPS Pub 6-3).

SSN6-14 Numeric Must be valid Social Security number. Required.

Case Number15-29AlphanumericOptional field for State use only; blanks acceptable.

Last Name 3O-49AlphaMust not be all blanks; start name in column 3O, must be uppercase. No imbedded blanks or apostrophes. Required. (See Exhibit O for samples of proper coding of last names.)

First Name5O-64AlphaMust not be all blanks, start name in column 5O. Imbedded blanks acceptable. Required.

Amount Owed65-72NumericWhole dollar amounts only. No decimal points, dollar signs, commas or plus/minus signs. Amount must be at least $15O for AFDC/foster care. Amount must be at least $500 for Non-AFDC. Right justify and zero fill (Example: $1500.00=00001500). Required.

Filler73 AlphanumericMust be Blank

Case Type

Indicator74AlphaA=AFDC/foster care,

N=Non-AFDC. Required.

Filler 75-80AlphanumericMust be Blank

EXHIBIT B

Page 3 of 3

Data Transmittal

Due to the nature of this program, it is crucial that information is forwarded to lRS timely. For this reason, States are encouraged to update cases by use of the personal computer (EXHIBIT Z). Also available to States is the use of a tape to tape transfer system. The machines used for this purpose are known as MITRONS. EXHIBIT CC contains current instructions for using the MITRON machine. It should be noted that tapes sent via MITRON have specifications differing from those tapes mailed. Currently MITRONS will only be used for submitting weekly update tapes to 0CSE. Procedures for other tape transfers will be established at a future date.

Shipping and Handling

Each State will provide input on magnetic tape in the format described above on or before September 18 or December 4 to the following address:

Special Collections Unit

Office of Child Support Enforcement

Department of Health and Human Services

370 L'Enfant Promenade S.W.

Washington. D.C. 20447

Attention: Tax Refund Offset - Tape Processing "Do Not Open In Mailroom"

Each carton and tape should be clearly labeled as follows:

State name

Tax Refund Offset Processing - Final Submittals

or

Tax Refund Offset Processing - Test Tape

A transmittal form listing the number of reels in the shipment and the number of each reel must be sent with each tape. The transmittal should include the point of contact within the submitting agency, including telephone number. Without these transmittals, the possibility of OCSE processing incorrect data is greatly increased.

OCSE will continue keeping tapes received from States and recycling them for reuse. Likewise, States should keep tapes received from OCSE for use in submitting updates and other required tapes. Please note, that in order to insure that Internal Revenue Service Security Guidelines are followed, all States will be required to degauss tapes received from the Special Collections Unit after processing is completed.

EXHIBIT D

PRE-OFFSET AND OFFSET NOTICE LOCAL CONTACT

PHONE/ADDRESS TAPE SPECIFICATIONS

STATE SUBMITS TO OCSE

FILE CHARACTERISTICS

Configuration9 Track, Odd Parity

Character Code EBCDIC

Density 1600 BPI

Volume Labels None

File Labels None

Record Size 195 characters

Block Size7,800

RECORD SPECIFICATIONS

Field Name Position # of Characters Criteria

State Code12Must be valid 2 character

alpha State Code. (See

EXHIBIT Y - FIPS PUB 6-3).

Local Code33Must be 3 digit Local

Code which will also be

used in individual

submission. (FIPS

code is recommended - See

EXHIBIT Y - FIPS PUB 6-3).

Telephone Number 6 14Must contain the area code

and phone number of Agency

contact. (Example: (301)

555-1212.

Address Line 1 2O 35Line 1 must contain the name of the Office. (Example: Bureau of Child Support Enforcement). A reference to 'Child Support or 'Family Support' must be included in each address. Do not use reference to 'IRS' in address. Specific names of contact persons should not be used. Titles are 0K.

Address Line 2 5535Line 2 through Line 5

Address Line 3 9035should contain additional

Address Line 4 12535reference Names and

Address Line 5 16035address information Examp1e: Line 2 through Line 4, Tax Offset Unit

101 Tera P1ace

Anywhere, MD 20852)

Filler 195 1

EXHIBIT E

(SAMPLE)

REQUEST FOR UPDATE OF TRANSMITTAL

TO: OFFICE OF CHILD SUPPORT ENFORCEMENT

DEPARTMENT OF HEALTH AND HUMAN SERVICES

370 L'Enfant Promenade, S.W.

Washington, D.C. 20447

FROM: Name, title and jurisdiction

(requesting official)

SUBJECT:Request for update of cases from the State's

certified submittal for Federal Tax Refund Offset Program.

I hereby request that the enclosed case requests from the State of

be deleted, modified, or marked as a state payment, or case transfer for administrative review. All data provided is indicated according to processing year.

Tape number :

Total number of Deletions, (by processing year) for cases submitted by

this State:

Total number of Modifications, (by processing year) for cases submitted by this State:

Total dollar amount of Deletions, (by processing year) for cases submitted by this State:

Total number of State Payments, (by processing year):

Total dollar amount of State payments, (by processing year):

Total number of cases to be transferred:

Total number of Deletions for cases submitted by another State:

Total number of Modifications for cases submitted by another State:

Total dollar amount of deletions for cases submitted by another

State:

(Signature of Requesting Official)

Agency Contact

Phone Number

EXHIBIT F

IRS OFFSET NOTICE

WILL BE PROVIDED

IN THE FUTURE.

EXHIBIT G

DEPARTMENT OF HEALTH AND HUMAN SERVICES

OFFICE OF CHILD SUPPORT ENFORCEMENT

STATEMENT OF SERVICE FEE

*******************************************************************

* NAME OF STATE * PERIOD COVERED * * * FEBRUARY *

*******************************************************************

* ORGANIZATION PROVIDING SERVICE * KIND OF SERVICE *

* OFFICE OF CHILD SUPPORT ENFORCEMENT * INCOME TAX REFUND OFFSET *

*******************************************************************

* ORGANIZATION *

* *

* *

* *

* *

* *

*******************************************************************

* DESCRIPTION OF SERVICE FEE *

* SEE MONTHLY COLLECTION REPORT: FEB *

* *

* *

* 5 CASES OFFSET $5.79 EACH $28.95 *

* --------- *

* TOTAL DEDUCTED FROM COLLECTIONS $28.95 *

* *

* *

*******************************************************************

* PLEASE NOTE: IF YOU HAVE ANY QUESTIONS REGARDING THIS SERVICE *

* FEE, REFER TO: *

*OFFICE OF CHILD SUPPORT ENFORCEMENT *

*370 L'Enfant Promenade, S.W. *

*WASHINGTON, D.C. 20447 *

*ATTN: SPECIAL COLLECTIONS UNIT *

* (202) 401-9389 *

*******************************************************************

* STATEMENT PREPARED:FEBRUARY 25, 1992 *

* *

* *

* PLEASE KEEP A COPY OF THIS STATEMENT FOR YOUR RECORDS *

* * *******************************************************************

*THIS AMOUNT SUBJECT TO CHANGE FOR THE 1992 P.Y.

EXHIBIT H

INITIAL SUBMISSION/TEST TAPE EDIT/VALIDATION TAPE SPECIFICATIONS

OCSE RETURNS TO STATES

File Characteristics

1. Configuration 9 Track Odd Parity

2. Character Code EBCDIC

3. Recording density 1600 BPI

4. Label (header, trailer) None

S. Record Size 108

6. Block Size 8,640

Record Specifications

FIELD NAMEPOSITIONTYPE

STATE ABBREVIATION 1-2 Alpha

LOCAL CODE 3-5 Alphanumeric

SSN 6-14Alphanumeric

CASE NUMBER 15-29Alphanumeric

LAST NAME 30-49Alphanumeric

FIRST NAME 50-64Alphanumeric

ARREARAGE 65-75 Numeric S9(9)V99

TRANSACTION CODE 76-77 Alphanumeric

TRANSACTION CODE 78-79 AlPhanumeric

TRANSACTION CODE 80-81 Alphanumeric

TRANSACTION CODE 82-83 Alphanumeric

CASE TYPE INDICATOR 84 A=AFDC and foster care, N=Non-AFDC

FILLER 85-108 Alphanumeric

TRANSACTION

CODES TRANSLATIONS

(up to four)

01 State code invalid

02 SSN invalid

03 Last name invalid or blank

04 First name blank

05 Amounts invalid or less than $150.00 for AFDC and

foster care and less than $500.00 for Non-AFDC

06 Duplicate Record

07 Invalid type code (must not be 'D' or 'M' or 'S' or 'T')

08 Amount greater than $20,000 (warning only)

09 Invalid Case Type Indicator (must be 'A' or 'N')

EXHIBIT I

Page 1 of 2

Update EDIT/VALIDATION TAPE SPECIFICATIONS

OCSE RETURNS TO STATES

File Characteristics

1. Configuration 9 Track Odd Parity

2. Character Code E8CDIC

3. Recording density 1600 BPI

4. Label (header trailer) None

5. Record Size 1O8

6. Block Size 8,640

Record Specifications

FIELD NAME POSITION TYPE

STATE ABBREVIATION 1-2 Alphanumeric

LOCAL CODE 3-5 Alphanumeric

SSN 6-14 Alphanumeric

CASE NUMBER 15-29 Alphanumeric

LAST NAME 30-49 Alphanumeric

FIRST NAME 50-64 Alphanumeric

ARREARAGE 65-75 Numeric 9(9)V99**

TRANSACTION CODE 76-77 Alphanumeric

TRANSACTION CODE 78-79 Alphanumeric

TRANSACTION CODE 80-81 Alphanumeric

TRANSACTION CODE 82-83 Alphanumeric

TRANSACTION TYPE* 84 Alphanumeric

COLLECTION INDICATOR*** 85 Alphanumeric 'Y'or'N'

CASE TYPE INDICATOR 86 A=AFDC and foster care N=Non-AFDC

TRANSFER STATE 87-88 Alpha

LOCAL CODE OF TRANSFER STATE 89-91 Alphanumeric

FILLER 92-101 Alphanumeric

PROCESSING YEAR 102-103 Alphanumeric

FILLER 104-108 Alphanumeric

*(D=delete; M=mod; S=State payment; T=Transfer for Administrative Review, L=Change in local code by submitting State)

** Arrearage amount returned will be unsigned.

***Warning: A previous collection affects this update.

EXHIBIT I

Page 2 of 2

TRANSACTION

CODES TRANSLATIONS

(up to four)

01 State Code invalid (Submitting State)

02 SSN invalid

03 Last name invalid or blank

04 First name blank

05 Amount invalid

06 Duplicate

07 Invalid type code (must be 'D' or 'M' or 'S' or 'T')

09 Invalid case type indicator (must be 'A' or 'N')

10 Amount equals arrearage

11 Amount increases arrearage

12 SSN not on Master file

13 SSN not on Master for this state

14 Name does not agree

15 Deleted from Master File

16 Amount changed on Master File

17 No Record of offset

22 Transfer Accepted

23 Invalid transfer State code

24 No transfer reported by submitting State

25 Incorrect case type

26 Incorrect processing year

28 State payment accepted

29 Local Code is blank (for type code 'L')

30 Submitting State's Local Code Changed on Master

EXHIBIT J

CERTIFICATION TAPE SPECIFICATION

OCSE RETURNS TO STATES

File Characteristics

1. Configuration 9 Track Odd Parity

2. Character Code EBCDIC

3. Recording density 1600 BPI

4. Label (header,trailer) None

5. Record Size 108

6. Blocking Factor 100 Records per block

7. Block Size10800

Record Specifications

FIELD NAME POSITION TYPE

STATE ABBREVIATION1-2 Alpha

LOCAL CODE 3-5 Alphanumeric

SSN 6-14 Alphanumeric

CASE NUMBER 15-29 Alphanumeric

LAST NAME 30-49 Alphanumeric

FIRST NAME 50-64 Alphanumeric

ARREARAGE 65-75 Numeric S9(9)V99

PRIORITY 76-77Numeric

CASE TYPE INDICATOR 78 A=AFDC and foster care,

N=Non-AFDC

TRANSFER STATE 79-80 Alphanumeric

LOCAL CODE OF

TRANSFER STATE 81-83 Alphanumeric

FILLER 84-108Alphanumeric

EXHIBIT K

UNACCOUNTABLE TAPE SPECIFICATIONS

OCSE RETURNS TO STATES

File Characteristics

1. Configuration 9 Track Odd Parity

2. Character Code EBCDIC

3. Recording density 1600 BPI

4. Label (header,trailer) None

5. Record Size 108

6. Block Size 8640

Record Specifications

FIELD NAME POSITION TYPE

STATE ABBREVIATION 1-2 Alpha

LOCAL CODE 3-5 Alphanumeric

SSN 6-14 Alphanumeric

CASE NUMBER 15-29 Alphanumeric

LAST NAME 30-49 Alphanumeric

FIRST NAME 50-64 Alphanumeric

ARREARAGE 65-75 Numeric S9(9)V99

ERROR CODE 76-77 Alphanumeric

NAME CONTROL* 78-81 Alphanumeric

CASE TYPE INDICATOR 82 A=AFDC and foster care,

N=Non-AFDC

TRANSFER STATE 83-84 Alphanumeric

LOCAL CODE OF

TRANSFER STATE 85-87 Numeric

FILLER 88-108 Alphanumeric

ERROR CODE TRANSLATION

18 - SSN not on the IRS Taxpayer Master File.

19 -The first four characters of the last name do not match the IRS master file for this SSN.

20 - Invalid combination of name and SSN**.

21 - Record Not Available (Test Tape Only)

*The first four characters of the name as reported by IRS.

**This code also incorporates SSN's placed in the invalid segment of the IRS file for other reasons such as the account is being reviewed by IRS, or other reasons which IRS will not disclose due to taxpayer confidentiality. Therefore if the State is confident that the correct name and SSN are being used, we encourage you to resubmit the case again next year. Bankruptcy is also no longer disclosed by IRS.

EXHIBIT L Page 1 of 2

MONTHLY COLLECTION/ADDRESS REPORT TAPE SPECIFICATIONS

OCSE RETURNS TO STATES

File Characteristics

1. Configuration 9 Track Odd Parity

2. Character Code EBCDIC

3. Recording Density 1600 BPI

4. Label (header,trailer) None

5. Record Size 220

6. Blocking Factor 100

7. Block Size 22000

Record Specifications

FIELD NAME POSITION TYPE

State Code 1 - 2 Submitting State Abbreviation

Local Code 3 - 5 Three Digit Numeric Code

Soc Sec Num 6 - 14 9 digit Social Security Number

Case Number 15 - 29 Case Identification Number

Last Name 30 - 49 Absent Parent's Last Name

First Name 50 - 64 Absent Parent's First Name

Arrearage 65 - 75 Arrearage Amount is in dollars and cents (2 decimal places)

Collection Amount 76 - 86 Offset Amount is in dollars and

cents (2 decimal places)

Adjustment Amount 87 - 97 Amt IRS refunded to taxpayer

(reported as positive)

Adjustment Year 98 - 99 Year of original offset

Tax Period For Offset 100 - 101 Two digit tax year

Return Indicator 102 - 102 Y = Joint return N = No

Case Type 103 - 103 A = AFDC and foster care

N = Non-AFDC

Transfer State 104 - 105 State conducting administrative review Transfer local Code 106 - 108 Local code of transfer state

Names ** 109 - 143 Names of absent parent as it is reported by IRS

Street Address ** 144 - 178 Current mailing address

City and State ** 179 - 203 City and State of residence

Zip Code ** 204 - 208 Zip Code

Filler 209 - 220 Spaces

These fields will be blank filled for adjustment records.

(Collection Amount = 0)

EXHIBIT L

Page 2 OF 2

STATE TOTAL RECORD SPECIFICATION

(Last Record on File)

FIELD NAME POSITION Descriptions

State Code 1 - 2 Submitting state abbreviation

Filler 3 - 5 Blanks

Total 6 - 14 Contains *TOTAL*

Filler 15 - 34 Blanks

Adjustment Count 35 - 49 Number of adjustments

Collection Count 50 - 64 Number of collections

Arrearage Amount 65 - 75 Total arrearage amount on offseted cases

(dollars and cents)

Collection Amount 76 - 86 Total collection amount

(dollars and cents)

Adjustment Amount 87 - 97 Total adjustment amount

(dollars and cents)

Net Amount 98 - 108 Net Amt = Coll Amt - Adj Amt

(dollars and cents)

Filler 109 - 220 Blanks

EXHIBIT M

FEDERAL TAX OFFSET CONTACT FORM

PLEASE RETURN BY SEPTEMBER 1, 1991 TO:

SPECIAL COLLECTIONS UNIT

OFFICE OF CHILD SUPPORT ENFORCEMENT

370 L'ENFANT PROMENADE, S.W.

WASHINGTON, DC 20447

BELOW PLEASE LIST THOSE INDIVIDUALS WHO WE MAY CONTACT IN THE TAX OFFSET UNIT AT YOUR STATE:

CONTACT NAME:______________________________________

______________________________________

_____________________________________

PHONE NUMBERS:_____________________________________

_____________________________________

____________________________________

ANY ADDITIONAL NOTES CONCERNING YOUR UNIT:

EXHIBIT N

Page 1 of 2

UPDATE SPECIFICATIONS

STATE SUBMITS TO OCSE

Tape Submission Requirements

All magnetic tapes submitted by States to OCSE for update to IRS for the Tax Refund Offset process must conform to the following specifications:

1. Media Heavy duty MYLAR magnetic

data tape.

2. Configuration IBM 9-track odd parity

3. Recording Density 1600 BPI

4. Labels (header,trailer) No Label (NL)

5. Record Size 83 characters (fixed)

6. Block Size 9545

7. Data Code EBCDIC

Update Record Specifications

All data records are required to be in the following format. (Records that deviate from the specified layout will NOT be forwarded to IRS).

Field Name Position Type Criteria

Submitting State 1-2 Alpha Must be valid FIPS 2 character alpha abbreviation for the State which initially submits the case for offset; must be constant throughout the file. Required. (See Exhibit Y - FIPS Pub 6-3).

Local Code 3-5NumericWhen used it must be three digit numeric local code. FIPS code is suggested (See Exhibit Y - FIPS Pub 6-3).

SSN6-14 NumericMust be valid Social Security number. Required.

Case Number15-29Alpha-Optional field for State use

numericonly; numeric blanks acceptable.

Last Name30-49 AlphaMust not be all blanks; start name in column 30, must be uppercase. No imbedded blanks or apostrophes. Required.

First Name50-64AlphaMust not be all blanks, start name in column 50. Imbedded blanks acceptable. Required.

EXHIBIT N

Page 2 of 2

Field Name Position Type Criteria

Amount Owed 65-72 NumericWhole dollar amounts only. No decimal points, dollar signs, commas or plus/minus signs. Amount must be at least $150 for AFDC/foster care. Amount must be at least $500 for Non-AFDC. Right justify and zero fill (Example: 1500.00=00001500). Required.

Transaction

Type 73 AlphaD= Delete

M=Modify

S=State Payment

T=Transfer for Administrative

Review to State with the order.

L=Change Submitting State local code

Case Type

Indicator 74 Alpha A=AFDC/foster care,

N=Non-AFDC. Required.

Transfer

State 75-76 AlphaMust be valid FIPS 2 character alpha abbreviation; must be constant throughout the file. (See Exhibit Y - FIPS Pub 6-3). Required when State submits transfer. Required when transfer State updates a case.

Local Code

for transfer 77-79 NumericWhen used it must be three digit numeric local code. FIPS code is suggested (See Exhibit Y - FIPS Pub 6-3).

Filler 80-81 Alpha-

numeric Must be Blank

Processing 82-83 NumericYear Tax Refund was offset. Required Year for reporting all updates from processing year 1984 to present.

*The term "Transfer State" will be used for interstate cases requiring an administrative review in the State with the order. When a case is referred for the review to the State with the order, the submitting State must notify OCSE through the update process that the case is being transferred. See update section for specific information.

EXHIBIT 0

SAMPLE CODING FOR LAST NAMES

When cases are submitted to the Internal Revenue Service for processing against the taxpayer master file, a name-control and SSN are compared to the master file for a match. Records that do not match exactly to the IRS file will be rejected. To ensure that cases are able to be processed the following samples demonstrate the proper manner in which to submit a last name. The last name is coded in columns 30-49 of the case record. Special attention should be given to columns 30-33 where the name-control is extracted.

NAME COLS. 30-33

John Brown BROW

John Di Angelo DIAN

John O'Neill ONEI

John En, Sr. EN

Abdullah Allar-Sid ALLA

Guillermo M. Pachelo Livera PACH

Juan de la Rose y Obregon DELA

Jose Alvarado Nogales ALVA

Elena Torres vda de Conto CONT

Maria Riveria de Cruz CRUZ

Elisa de la Rosario-Rodriquez DELA

Monsita Gonzalez De Jesus GONZ

Juan De Jesus DEJE

Jose Del Valle DELV

Juan Rodriquez Santiago RODR

Pedro Torres-Lopez TORR

Pablo Cruz y Gonzalez CRUZ

Juan Lopez Corto LOPE

John A. El-Roy EL-R

EXHIBIT P

ADDRESS TAPE SPECIFICATION FROM OCSE TO STATES

FOR USE BY THOSE STATES ISSUING THEIR OWN PRE-OFFSET NOTICES

FILE CHARACTERISTICS

CONFIGURATION9 TRACK, ODD PARITY

CHARACTER CODEEBCDIC

RECORDING DENSITY1600 BPI

VOLUME LABELSNONE

FILE LABELSNONE

RECORD SIZE324 CHARACTERS

BLOCK SIZE 8100

RECORD FORMAT

FIELD NAMEPOSITIONLENGTHDESCRIPTION

FILLER1 1FILLER

STATE CODE2 2STATE ABBREVIATION

CASE TYPE4 1A=AFDC, N=NAFDC

SSN5 9SOCIAL SECURITY NUMBER

CASE ID1415CASE ID NUMBER

FILLER29 7FILLER

LOCAL CODE36 3LOCAL CODE

OBLIGOR'S FULL NAME3945FIRST NAME, LAST NAME

STREET ADDRESS LINE 28445ADDITIONAL ADDRESS INFORMATION IF OBLIGOR LIVES IN A FOREIGN COUNTRY. THIS DATA ELEMENT IS BLANK IF OBLIGOR LIVES IN U.S.

STREET ADDRESS LINE 112945STREET ADDRESS OR P.O. BOX NUMBER

CITY AND STATE17445CITY AND STATE

ZIP CODE219 9ZIP CODE

FILLER22836SPACES

FIRST NAME AS INPUT26415FIRST NAME SUBMITTED BY STATE

MIDDLE NAME27915NOT USED, SPACE FILLED

EXHIBIT P

PAGE 2 OF 2

LAST NAME29420LAST NAME SUBMITTED BY STATES

DATE OF ADDRESS 314 4IRS NO LONGER PROVIDES THE DATE. THE FORMAT IS YYMM.

FILLER318 6SPACES

TYPE OF ADDRESS RETURN324 1CONSTANT 'T'

EXHIBIT Q

DEPARTMENT OF HEALTH AND HUMAN SERVICES

OFFICE OF CHILD SUPPORT ENFORCEMENT

SPECIAL COLLECTIONS UNIT

BILLING FOR GOODS OR SERVICES PROVIDED

REIMBURSABLE PROJECTS

************************************************************************ *NAME 0F STATE PERIOD C0VERED * * *

************************************************************************ ORGANIZATION PROVIDING SERVICE * KIND OF SERVICE * OFFICE OF CHILD SUPPORT ENFORCEMENT * OVERPAYMENTS # ADJUSTMENTS * ************************************************************************ ORGANIZATION BILLED * *

* * * *

* * *

************************************************************************ DESCRIPTION OF BILING * FOR DETAILS, SEE MONTHLY COLLECTION REPORT * *

* *

* TOTAL CHARGES THIS INVOICE $3,049,680.00 *

* * * ********************************************************************** * PLEASE NOTE IF YOU HAVE ANY QUESTIONS REGARDING THIS BILL * REFER TO OFFICE OF CHILD SUPPORT ENFORCEMENT *

* * * *

* * *

************************************************************************ PLEASE FORWARD YOUR CHECK OR MONEY ORDER MADE PAYABLE TO * INTERNAL REVENUE SERVICE * FRESNO SERVICE CENTER * *

* ATTN: BRANCH CHIEF, ACCOUNTING BR. * P.O. BOX 72O67, STOP 42 * FRESNO, CALIFORNIA 93776 *

* *

* PLEASE REMIT WITHIN 10 DAYS AFTER RECEIPT OF BILL *

* PLEASE RETURN A COPY OF THIS BILL WITH YOUR REMITTANCE *

* *

* BILLING PREPARED 11/8/91 * * * ************************************************************************

(SAMPLE) EXHIBIT R

Return by September 1

TO :Special Collections Unit

Office of Child Support Enforcement

Department of Health & Human Services

FROM :Name, title and jurisdiction

(State IV-D Director)

SUBJECT :Notification of issuance of pre-offset notice, offset notice and final case submittal.

This agency will mail pre-offset notices to the absent parent.

* YOU ARE NOT REQUIRED TO SUBMIT EXHIBIT S yes

no

OCSE will mail pre-offset notices to the absent parent.

* YOU MUST SUBMIT EXHIBIT S yes

no

OCSE will include the statement regarding credit bureau reporting in the pre-offset notice. yes

no

This agency will submit a local address tape for use on the IRS offset notice. (EITHER WAY, ADDRESS & PHONE MUST BE PROVIDED BELOW) yes

no

This agency will submit the final case submittals by

September 16

Novenber 25

* Those agencies not mailing their pre-offset notices must submit their final case file by September 16.

STATE ADDRESS FOR IRS OFFSET NOTICE

PLEASE PROVIDE CURRENT ADDRESS AND PHONE NUMBER EVEN IF LOCAL ADDRESSES ARE USED

Phone Number:

Contact person for further information: (for OCSE use, not for notice publication)

Phone Number:

(SAMPLE) EXHIBIT S

Return by September 1

CONTACT POINT FOR OCSE ISSUED PRE-OFFSET NOTICE

For those States electing to have OCSE issue their pre-offset notices, address information is needed in order to successfully issue the required notice. In addition to the State giving OCSE this information, we also need to know the format desired by the State for the addresses used in the pre-offset notice. Essentially the State has three options: 1) State address as the return address with State address as contact point; 2) State address as the return address with a local address as contact point; 3) local address as the return address with local address as the contact point. Below is a layout of the form to be used. Please fill in the address locations with the relevant information. Where local addresses are to be used, simply write "local address tape" as these addresses are forwarded to OCSE on tape. Where State addresses are used, please fill in the correct address to be used and telephone number. Finally IRS needs confirmation of the official State address to be used on the IRS offset notice. If local addresses are to be used on the IRS offset notice, simply write "local address tape". Please provide this in the space below. This form should be completed and returned to OCSE by September 1.

RETURN ADDRESS

CONTACT POINT

Phone Number:

*PLEASE NOTE THAT EVEN IF LOCAL ADDRESSES ARE TO BE USED, YOU MUST PROVIDE THE STATE IV-D ADDRESS AND PHONE NUMBER ON EXHIBIT R.

Contact person for further information: (for OCSE use, not for notice publication)

Phone Number:

(SAMPLE) EXHIBIT T

Non-AFDC Federal Tax Refund Offset Information Form

Custodial Parent's Name SSN Address Home Phone

Employer Work Phone

Absent Parent's Full Name SSN Address Home Phone Employer Work Phone Employer's Address

Children's Name (1) DOB (2) DOB (3) DOB (4) DOB

I have received public assistance in the past. YES NO

When? Where?

STATE

Date of Support Order

State Issuing Support Order County or Court

Support Amount $ per Date of last payment

Current Amount of Arrears $ from to

Conditions for Submittal

1) There is a valid court or administrative order for child support.

2) The absent parent must have a child support arrearage of at least

$5OO.OO.

3) The absent parent's social security number has been verified.

4) A fee of $25.00 may be charged for each case submitted for offset.

5) There is no guarantee that monies will be collected on my behalf.

6)If an offset is made on my behalf, the State has the authority to hold the refund (if it involves a joint return) six months before sending the collection to me.

7)If the order for child support was not entered in this State, the State must have a copy of the order, any modifications, and a copy of the

support payment record or a signed affidavit from me before the case can be submitted for offset.

8)I understand that if I have received public assistance in the past that any child support debt owed to the State may be satisfied first.

9)I understand that I am personally liable for the return of any amounts received by me which were paid erroneously, including any amounts which must be returned due to the filing of an amended return by the absent parent's spouse.

I swear or affirm that the information provided in this form is true and correct to the best of my knowledge.

Signature Date

---------------------------------------------------------------------

Witness Date

EXHIBIT W

TO:SPECIAL COLLECTIONS UNIT

OFFICE OF CHILD SUPPORT ENFORCEMENT

DEPARTMENT OF HEALTH AND HUMAN SERVICES

FROM:NAME, TITLE AND JURISDICTION

(STATE IV-D DIRECTOR)

SUBJECT:OFFSET NOTICE ADDRESS OR PHONE NUMBER CHANGE

LOCAL CODE:

ADDRESS CHANGE:

PHONE CHANGE:

CONTACT PERSON IF FURTHER INFORMATION IS NEEDED:

(FOR OCSE USE ONLY)

PHONE NUMBER:

EXHIBIT X

Return by September 1

TO: Special Collections Unit

Office of Child Support Enforcement

370 L'Enfant Promenade, S.W.

Washington, D.C. 20447

FROM: (Name, Title, State)

SUBJECT: CERTIFICATION OF VERIFICATION OF LOCAL/STATE ADDRESSES

AND PHONE NUMBERS TO BE USED ON THE PRE-OFFSET/IRS OFFSET NOTICE

TO TAXPAYERS

I certify that every local address and corresponding phone number has been verified for accuracy. I certify that these addresses/phone numbers are correct to be issued on the OCSE issued pre-offset notice and/or the IRS Offset Notice issued to taxpayers for the 1991 processing year. I also certify that the State address and phone number listed below is correct to use on the Pre-Offset and/or IRS Offset Notice in the event that no local address/phone number has been provided.

PLEASE PRINT CORRECT STATE ADDRESS/PHONE NUMBER BELOW

____________________________________________________

____________________________________________________

____________________________________________________

____________________________________________________

____________________________________________________

PHONE NUMBER _______________________________________

Signature of IV-D Director _______________________________________________

EXHIBIT Z

LOG ON PROCEDURES FOR FEDERAL TAX REFUND OFFSET PROGRAM

1. When you are connected to the network, TYMNET will display

a request for your terminal identifier. This message will appear garbled on your PC screen, wait a few seconds and type "a" for identifier.

2. TYMNET will display the number of the remote access node to

which you are connected, followed by a port number and will request that you log in.

-NNNN-PPP

Please log in:

3. Type OCSE4 and carriage return (CR)

4. TYMNET will prompt for your password.

Password: (type password and carriage return)

5. TYMNET will display the following information:

SELECT TERMINAL TYPE:

0 DEC VT100

Type 0 and carriage return

6. TYMNET will display an acceptance message, such as

WELCOME TO THE OCSE/NCC VTAM NETWORK

to indicate that you are connected to the host computer.

7. Type OCSETSO and carriage return.

8. Host computer display

ENTER USERID- (type userid and carriage return)

Please contact Special Collection Unit (202) 401-9389 to register for your USERID.

9. Password: (type in your password and carriage return)

10. Host computer will display: Selection Menu for Updates

EXHIBIT Z

PAGE 1 of 8

LOGON PROCEDURES FOR FEDERAL TAX REFUND OFFSET PROGRAM:

Please refer to ACF/NCC FTS2000 Network Access Information Sheet which will be provided by OCSE when password is issued to State. Please feel free to contact the Special Collections Unit on (202) 401-9389.

EXHIBIT AA

NOTICE OF INTENTION TO ISSUE PRE-OFFSET NOTICE

To:Special Collections Unit

Office of Child Support Enforcemetn

Family Support Administration

Fourth Floor

370 L'Enfant Promenade, S.W.

Washington, DC 20447

ATTENTION TAX OFFSET/DO NOT OPEN IN MAIL ROOM

Please specify, by July 15, 1992, which option your State chooses.

_____________ 1) Our State will issue our own pre-offset notices for processing year 1993. These notices will contain the required information as specified in the Action Transmittal, and will be mailed no later than October 31, 1992.

_____________ 2) Our State requests OCSE to issue our pre-offset notices for processing year 1993, at a cost to us of $.32 per notice. We estimate that by September 18, we will submit _______________ cases (combined AFDC and non-AFDC), for a total cost to mail pre-offset notices of ________________. A check for this amount is attached. We understand that notices will not be mailed without this advance payment.

If at the time of final tape submittal (September 18, 1992), it turns out that our initial estimate was too low, we will include a check for the balance due. If we have over estimated the caseload, resulting in an overpayment, the State will be issued a refund for the excess amount following the completion of the pre-offset notice mailing. It is our understanding that failure to comply could result in pre-offset notices not being issued for our State.

_________________________

(Name, title and signature of the IV-D Director)

75

EXHIBIT BB

Page 1 of 2

HEALTH RESOURCES AND SERVICES ADMINISTRATION

Payment Information Form

Treasury Financial Communications System

The information requested on this form concerning your financial institution, and your account at that institution, should be available through your company's Treasurer or financial institution.

If your financial institution has on-line or off-line access to the Federal Reserve System, please complete only items 1 through 9 and 14. If your financial institution accesses the Federal Reserve Communications System through a correspondent financial institution, please complete all numbered items, except items 7 and 8.

1. Name of State Agency:

2. Address of Agency:

3. Contact Person:

4. Phone Number: Area Code ( )

5. Name of Financial

Institution:

6. Address of

Financial

Institution:

7. Financial institution's 9-digit ABA Routing Number for Transfers of Funds:______________________(Complete only if your financial institution has access to the Federal Reserve Communications System.)

EXHIBIT BB

Page 2 of 2

8. Telegraphic Abbreviation of Financial Institution: (Complete only if your financial institution has access to Federal Reserve Communication System.)

9. Financial Institution Account Number to Be Credited with the Funds:

10. Name of Correspondent Financial Institution through which your

Financial Institution Receives Electronic Funds Transfers:

11. Address of

Correspondent

Financial

Institution:

12. Correspondent Financial Institution's 9-Digit ABA Routing Number for Transfers of Funds: __________________________

13. Telegraphic Abbreviation of Correspondent Financial institution:

14. Signature and Title of Person completing this form:

Signature Title Date

Comments:

Mail completed form to:

Special Collections Unit

Office of Child Support Enforcement 370 L'Enfant Promenade, S.W.

Washington, D.C. 20447

Exhibit CC

1 of 5

MAGNETIC TAPE DATA TRANSFER

In an effort to develop a more efficient means of data transfer, OCSE added the ability for States to transfer their magnetic tapes via an electronic data transfer machine. Currently the machines used by OCSE and those purchased by the States are from the Mitron Systems Corporation and will therefore be referred to as "Mitrons".

Currently Mitrons will be used only for transmission of update tapes from States to OCSE. It is important that States realize that tape specifications for transmittal by Mitron are different from those tape that are mailed to OCSE, and that tapes mailed should remain the same as the format of previous years.

Data and transmission requirements which will be discussed further in this text are different than those required for regular tape processing by OCSE. It is vital for States to realize this distinction and keep both types of processing separate.

REQUIREMENTS

The following are the requirements for tapes to be sent via the Mitron:

o IBM Standard Label Format

o nine-track tapes

o density 1600 BPI

o maximum Block Size 9600 Bytes

o minimum of three files:

Header labels

Data

Trailer Labels

o one tape mark following the header labels & preceding the

first data block

o one tape mark following the last data block and preceding

the trailer labels

o two tape marks following the trailer labels

Exhibit CC

2 of 5

All tapes shall contain the following internal labels*:

o one volume label

o two header labels

o two trailer labels

* All labels shall have a record length and block size of 80

bytes

The following standards will be used in creating data in the label fields

VOLUME LABEL

Label fields Position # of Characters Criteria

Volume Label

Identifier 1-3 3 Constant "VOL"

Label Number 4 1 Constant "1"

Serial Number 5-10 6 6 Characters

Security Code 11 1

Blank 12-80 69 Blanks

Exhibit CC

3 of 5

HEADER/TRAILER LABEL 1

# OF

LABEL FIELDS POSITION CHARACTERS DESCRIPTIONS

LABEL IDENTIFIER 1-3 3 Constant:

Header: "HDR"

Trailer "EOF"

LABEL NUMBER 4 1 Constant "1"

DATA SET IDENTIFIER

PROJECT CODE 5-8 4 Constant "TAXO"

PERIOD 9 1 Constant "."

STATE CODE 10-11 2 Must be valid State abbreviation

code

PERIOD 12 1 Constant "." DATA SET NAME 13-19 7 Must be "IWKUPD"

FILLER 20-21 2 Blanks

SERIAL NUMBER 22-27 6 Character number

VOLUME SEQUENCE

NUMBER 28-31 4 Constant "0001"

DATA SET

SEQUENCE NUMBER 32-35 4 Constant "0001"

FILLER 36-42 7 Blanks

CREATION DATE 43-47 5 Year/Julian Date

FILLER 48 1 Blank

EXPIRATION DATE 49-53 5 Year/Julian Date SECURITY CODE 54 1 Blank (Not used by OCSE)

BLOCK COUNT 55-60 6 Number of Blocks

FILLER 61-80 0 Blanks

Exhibit CC

4 of 5

HEADER/TRAILER LABEL 2

# OF

LABEL FIELDS POSITION CHARACTERS DESCRIPTIONS

LABEL IDENTIFIER 1-3 3 Constant:

Header:"HDR"

Trailer:"EOF"

LABEL NUMBER 4 1 Constant "2"

RECORD FORMAT 5 1 F" for fixed

length

BLOCK LENGTH 6-10 5 (Block Size)

09545

RECORD LENGTH 11-15 5 (Record Size)

00083

TAPE DENSITY 16 1 "3" = 1600 BPI

DATA SET POSITION 17 1 Blank

FILLER 18-80 63 Blanks

Exhibit CC 5 of 5

When States are able to meet the requirements for transmitting via the Mitron, they should then contact OCSE. A test will be done with the State to ensure that all requirements have been met. The State should contact the Special Collections Unit on (202) 401-9389. The Special Collections Unit will request the name of a contact person and a telephone number from the State. The State will then be contacted by someone from the FSA Federal Systems Division to begin testing.