Payment of Internal Revenue Service Collections and Fees
April 22, 1976
TO :STATE AGENCIES ADMINISTERING CHILD SUPPORT ENFORCEMENT PLANS APPROVED UNDER TITLE IV-D OF THE SOCIAL SECURITY ACT, AND OTHER INTERESTED ORGANIZATIONS AND AGENCIES.
SUBJECT :Payment of Internal Revenue Service Collections and Fees
CONTENT :OCSE-AT-76-02 prescribes the procedures for application to the Regional Office for IRS collection of a delinquent amount of a child support obligation pursuant to 45 CFR 302.71. This Action Transmittal provides the procedures covering:
1.Payment to the State of amounts of child support collected on its behalf by IRS; and
2.Billing and recovery of fees in payment of costs incurred by IRS incident to collection action.
State Payee for Receipt of IRS Collections
1. Certification of State Payee
The State IV-D Agency head will submit to the Regional Office the original and two copies of a letter certifying an individual as the State payee to receive child support collected by IRS. If the designated State payee is other than the IV-D agency head, all copies of the letter will provide, in addition to the State payee's name and the certification of the IV-D agency head, the designated person's title, address, and signature acknowledging the designation.
2. Delegation of State Payee Function
Provided that the IV-D agency head retains full financial control of the operation of the IV-D plan (and program), as required by 45 CFR 303.20(b)(6) and (d), either a State-level IV-D agency employee or the official designated under State law or regulation to receive Federal funds on behalf of the IV-D agency may be designated State payee as the delegate of the IV-D agency head. -2-
3. Distribution of Copies of Certification
The Regional Office will retain a copy of the certification of State payee and forward the original and one copy to OCSE. OCSE will furnish a copy of the certification to the SRS Division of Finance for its use as the agent of OCSE for financial and accounting transactions in conjunction with child support collected by IRS and IRS collection fees.
Payment of IRS Collections and Fees
The actions required of the State IV-D agency within the overall system for payment of IRS collections and collection fees are shown herein in the sequence in which they would ordinarily occur. To provide the IV-D agency with effective management controls, the system employs time delay maximums for certain essential transactions and review requirements at specified intervals. The procedures cover IV-D agency actions for handling normal cases and for detection and correction of problems that could occur in a case.
1. IV-D Agency Control of IRS Collection Requests
The IV-D agency should employ a system for time controlling transactions from the date each request for IRS collection is submitted to the Regional Office. A model system which may be used for this purpose is described below.
a.A standard, suspense control filing system is established in the IV-D agency.
b.A copy of each request for IRS collection is placed in the file with a suspense date 30 days after the request was submitted, pending receipt of the returned copy from the Regional Office.
c.The copy is removed from the suspense file and destroyed upon receipt of the copy of the request returned by the Regional Office.
d.If a returned copy of the request has not been received by the suspense date established under paragraph 1.b., above, the IV-D agency coordinates with the Regional Office to resolve the problem.
e.If the returned copy states that the request is disapproved, the IV-D agency takes action as appropriate in the case based on the reasons given for disapproval.
f.If the returned copy states that the request was certified to IRS for collection, the IV-D agency:
(1)Records, or notifies the appropriate local office to record the certification control number on the Support Obligation Record as illustrated in OCSE-IM-75-03 in Section 184.108.40.206 and Exhibit 3; and
(2)Places the copy of the approved request in the suspense file, with a suspense date 120 days after the certification date, pending:
(a)the appearance of the case in an IRS monthly accounting of active cases in IRS centers; and
(b)receipt of a copy of the IRS center notice to the obligor of its action to collect; or
(c)the lapse of 120 days after certification prior to the occurrence of both transactions in paragraph 1.f.(2)(a) and (b), above.
g.When the transactions in paragraph 1.f.(2)(a) and (b), above, have both occurred, certified copy of the request is removed from the suspense file and placed in the case record file.
h.When the transactions in paragraph 1.f.(2)(a) and (b), above, have not both occurred within 120 days of certification of the case, the IV-D agency so informs the Regional Office.
2. Federal-Level IRS Collection Transactions
a.Upon receipt of the certified request for collection, the IRS center will send the obligor written notice of its action (or change in action) to collect. The IRS center will furnish a copy of the notice to OCSE.
b.OCSE will reproduce copies of the notice to the Obligor and distribute them to: (1) the IV-D agency; (2) the Regional Office; and (3) the SRS Division of Finance for its use as the agent of OCSE for IRS collection transaction
c.IRS will furnish the SRS Division of Finance a monthly accounting for each State of child support collection cases received or closed during the accounting period, and all cases pending collectionby IRS centers at the close of the accounting period. The IRS monthly accounting will show each case, as a separate line item, by: (1) certification control number; (2) name of obligor; (3) the amount certified for collection (shown by IRS as ("amount assessed"); (4) the amount collected by IRS during the accounting period; (5) any actions other than collection which affect the balance remaining for collection (shown by IRS as "amount adjusted"); (6) the balance remaining for collection after adjustment for collections or other transactions during the accounting period; and (7) any collection fee charged in a case during the accounting period.
d.Amounts equal to the amounts of child support collected by IRS will be paid periodically into the revolving fund established in the U. S. Treasury pursuant to section 452(c) of title IV-D and section 6305 of the Internal Revenue Code, as amended.
e. The SPS Division of Finance will transmit to the IV-D agency;
(1)The IRS monthly accounting of active child support cases pending collection for the State by service centers;
(2)A statement of the total amount of child support collected by IRS for the State based on the IRS monthly accounting; and
(3)A billing for collection fees charged to the State by IRS during the monthly accounting period.
f.The SRS Division of Finance will send the State payee a check, drawn on the revolving fund account in the U. S. Treasury, in an amount equivalent to the amount collected for the State by IRS for the monthly accounting period.
g. The SRS Division of Finance will pay IRS the amount claimed for collection fees during themonthly accounting period.
3. IV-D Agency Transactions re: IRS Collections
a.The State payee will receive, and process into the State's financial and accounting system, payment for IRS collections for the IRS monthly accounting period, The State payee will promptly notify the appropriate IV-D officials of the pertinent detailsof such payment.
b.The IV-D agency will verify that the following are received within the month succeeding the month covered by the IRS monthly accounting period:
(1)The IRS monthly accounting of active cases pending collection for the State in IRS centers;
(2)The statement of the total amount of child support collected by IRS for the State for the monthly accounting period;
(3)Notification from the State payee of the pertinent details of the payment received for collections by IRS for the monthly accounting period; and
(4)The billing for collection fees charged to the State during the monthly accounting period.
c.If items (b)(1)-(4), above, have not been received within the month following the month of receipt of the last previous IRS monthly accounting of cases pending collection in IRS centers, the IV-D agency so informs the Regional Office.
d.Following receipt of items (b)(1)-(3), above, and prior to posting any amounts collected by IRS to Support Obligation Records, the IV-D agency will verify;
(1) The IRS monthly accounting of active cases pending collection in IRS centers against its own records;
(2)The amounts shown as collected in the IRS monthly accounting against the total amount of child support shown in the statement as collected for the monthly accounting period; and
(3)The total amount shown as collected in the statement against the amount reported by the State payee as actually received for the period.
e.During the verification process under paragraph 3.d., above, the IV-D agency should be alert to such theoretically possible discrepancies as the following examples:
(1)In verification of the IRS monthly accountingagainst IV-D agency case records: (a) obligor's name misspelled; (b) incorrect case control number; (c) case control number and obligor's name not of record in the IV-D agency; (d) case control number of case appears which should have been closed or superseded by another case control number; (e) omission of a case having an uncollected balance, without explanation; (f) amount shown as "assessed" fails to agree with the amount certified; and (g) amount shown as "adjusted" fails to agree with IV-D agency records and there is no satisfactory explanation.
(2)In verification of the amounts shown as collected with the statement of the total amount collected and, in turn, with the payment actually received, it may be revealed that an amount collected in a case has been omitted, in part or whole, from the total for the period, or the actual payment, or both.
f.Discrepancies found during the review under paragraph 3.d., above, which are outside the jurisdiction of the IV-D agency for reconciliation will be communicated to the Regional Office for resolution.
g.When the IV-D agency has reconciled its records and accounts as prescribed in paragraph 3.d., above,
it will record, or notify the appropriate local office to record, amounts collected in appropriate Support Obligation Records as illustrated in OCSE-IM-75-3,in section 2.2.3 and Exhibit 3. Amounts recorded will be distributed as would any other child support obligation amount collected.
4. Payment by IV-D Agency of IRS Collection Fees
Within 30 days after receipt by the IV-D agency of a billing for IRS collection fees, payment will be made to the Social and Rehabilitation Service. Payment will be forwarded to the Director, Division of Finance, SRS, Mary E. Switzer Building, 330 C Street, SW., Washington, D.C. 20201. When a fee for which billed is believed erroneous, the billing will be paid less the erroneous amount. The IV-D agency will transmit, with the reduced amount of payment, a letter setting forth the facts supporting the determination of erroneous billing to provide SRS Division of Finance the basis to reconcile the matter and further advise the IV-D agency.
TO: Acting Regional Directors, OCSE
______________________________ Acting Director
Office of Child Support Enforcement