P.L. 96-265: Use of IRS to Collect Child Support and FFP for Duties Performed by Courts


Publication Date: August 29, 1980



Date: August 29, 1980


SUBJECT: P.L. 96-265 Requirements on (1) Use of Internal Revenue Service to Collect Child Support for Non-AFDC Families, and (2) Federal Matching for Child Support Duties Performed by Certain Court Personnel.

BACKGROUND: P.L. 96-265, the Social Security Disability Amendments of 1980, became law on June 9, 1980. This statute contains several provisions affecting the child support enforcement program. Two of the provisions, use of IRS to collect child support for non-AFDC families and Federal matching for certain court costs, have statutory effective dates of July 1, 1980. Because of this extremely short implementation period, we are unable to issue regulations before these two requirements become effective. Therefore, we are issuing this instruction to inform IV-D agencies of the requirements and to specify procedures for implementation during the period before regulations are issued.

CONTENT: Use of IRS to Collect Child Support for Non-AFDC Families

Current regulations at 45 CFR 302.71 authorize, IV-D agencies to use the Internal Revenue Service for collecting assigned support payments on behalf of families receiving AFDC, if the agencies have made diligent and reasonable efforts to collect the payments without success and the amount sought is based on noncompliance with a court order for support. IV-D agencies may use IRS collection procedures only after certification of the request by the OCSE Regional Representative. Agencies must reimburse the Federal government for any charges imposed by the IRS for making the collection.

Section 402 of P.L. 96-265 amended section 452(b) of the Social Security Act (the Act) to authorize use of IRS collection mechanisms for families not receiving AFDC who apply for IV-D services undersection 454(6) of the Act, subject to the same certification and other requirements applicable to families receiving AFDC. This provision is effective July 1, 1980.

During the period before regulations are issued, IV-D agencies are instructed to follow the requirements in 45 CFR 302.71 for both AFDC and non-AFDC families. In addition, States must follow the instructions transmitted by OCSE-AT-76-2, dated February 11, 1976, and OCSE-AT-76-07, dated April 22, 1976, which provide further guidance on the use of IRS for collecting support payments.

As explained in OCSE-AT-76-2, the IRS charges the State a fee of $122.50 for each collection requested. In the case of AFDC families, the States receive Federal matching for this fee at a 75 percent rate. P.L. 96-272, enacted on June 17, 1980, provides the same 75 percent match for services provided to non-AFDC families.

Cases may arise in which a non-AFDC family has been unsuccessful in past attempts to collect child support and requests the use of IRS through the IV-D agency. Under 45 CFR 302.71(a)(4) through (6), the IV-D agency must attest in its IRS referral request that diligent and reasonable efforts have been made to collect support through the State's collection mechanisms as specified in the State plan. The IV-D agency also must describe the action taken and explain why State mechanisms failed to produce results. In cases involving prior enforcement action taken by individuals other than the IV-D agency, IV-D agencies are instructed to assess the actions already taken by the individual or his or her attorney and to compare them with the collection mechanisms specified in the State plan. Where the IV-D agency is satisfied that the enforcement actions already taken are comparable to the mechanisms in the plan, the agency need not repeat the actions before requesting IRS collection. Where the prior actions do not meet the specifications in the State plan, the IV-D agency must perform the additional procedures needed before forwarding a request for IRS collection. Any of the actions that are substituted for IV-D agency actions must be described and explained along with the IV-D agency actions in the request for IRS collection as required by 45 CFR 302.71(a)(4) through (6).

Federal Matching for Child Support Duties Performed by Certain Court Personnel

The Social Security Act at section 454(7) requires that State child support plans provide for entering into cooperative arrangements with appropriate courts and law enforcement officials to assist the child support agency in administering the program. Regulations at 45 CFR 304.21 allow States to claim FFP in expenditures for attorneys, prosecutors, and their staffs. These regulations also allow reimbursement of costs incurred by courts or court related agencies in providing child support enforcement services, including the costs of quasi-judicial officials such as masters, court commissioners or family court referees who do not make actual judicial determinations. However, these regulations do not provide for FFP in expenditures for officials making judicial decisions, for their supportive and administrative staffs, or for administrative costs incurred in support of judicial decisions, judges, or their staffs.

Section 404 of P.L. 96-265 added a new subsection (c) to section 455 of the Act that now authorizes FFP in expenditures for the staffs of judges and of other officials making judicial decisions, as well as for other administrative costs of making judicial decisions. Compensation for judges or other officials making judicial decisions continues to be ineligible for FFP. Costs of personal offices and routine travel for judges and other officials making judicial determinations are also ineligible for FFP. With regard to the new items of court-related expenditures now eligible for FFP, reimbursement is available only for expenditures in excess of calendar year 1978 expenditures for these terms. This provision is effective July 1, 1980.

The new expenditure items eligible for FFP include personnel, such as the bailiff, stenographer, and court reporter, who provide administrative or support services to officials making judicial decisions, insofar as these decisions are made with respect to cases that are being provided services under Title IV-D of the Act. The new expenditure items also include general and administrative expenses connected with the newly covered personnel, apportioned to include only costs associated with cases receiving services under the IV-D program.

IV-D agencies that wish to receive FFP in court expenditures under this provision must amend their cooperative agreements with courts to specify (1)the new specific expenditure items for which IV-D reimbursement will be claimed, and (2) the expenditures for these specific items in calendar year 1978 attributable to cases receiving services under the IV-D program. To receive FFP for the July 1, 1980 quarter, States must amend their cooperative agreements by the end of that quarter, September 30, 1980, to meet both of the above requirements. If it is not possible for a court under a cooperative agreement to reconstruct 1978 expenditures before September 30, 1980, an extension of this requirement until January 1, 1981 may be granted by OCSE Regional Representatives. However, no claims for FFP in the newly eligible expenditures can bc reimbursed until documentation of 1978 expenditures has been included, either as a part of or as an attachment to, the cooperative agreement.

During the period before regulations are issued, States may submit claims for these newly authorized court expenditures, but not until the expenditures for the items during a calendar year exceed calendar year 1978 expenditures for the items. Once the 1978 expenditure level is exceeded, the IV-D agency may claim reimbursement for the excess over the 1978 level.

Although section 404 requires implementation of the court costs provision on a calendar year basis, the provision becomes effective for expenditures beginning July 1, 1980. To ensure that appropriate costs are reimbursed in calendar year 1980, courts must compute their expenditures for the newly authorized items from January 1, 1980. If calendar year 1980 expenditures exceed the 1978 level before July 1, 1980, however, the IV-D agencies may claim reimbursement only for the excess expenses incurred after July 1, as permitted by section 404 of the statute.

OCSE-AT-77-03, dated January 28, 1977, specifies the documentation required to support claims for FFP in expenditures under cooperative agreements with courts. For individuals performing only IV-D functions, (i.e., IV-D services or services in support of judicial decisions with respect to cases receiving services under the IV-D plan) 100 percent of the costs of compensation are eligible for FFP. For individuals performing IV-D as well as other functions, an acceptable allocation method must be employed to equitably distribute costs based on time and effort. The alternative acceptable methods for allocation listed in OCSE-AT-77-03 are: daily time records; predetermined fixed rates negotiated with the IV-D agency; sampling techniques that haveprior approval from the IV-D agency; other methods the IV-D agency may propose, if reported to the OCSE regional office prior to the quarter in which the methods will be used as a basis for claiming FFP in IV-D program costs.

Because of the short implementation period for section 404 and the need to reconstruct costs for previous periods for which records may not be available, it may be necessary to develop other allocation methods for reconstructing expenditures for calendar year 1978 and for January 1 through June 30, 1980. Any alternative allocation method applied to these periods must be approved by the OCSE Regional Representatives.

REFERENCE: P.L. 96-265 provisions related to child support enforcement are being sent out under OCSE-IM-80-05, June 27, 1980.

INQUIRIES TO: Regional Representatives, OCSE

Deputy Director

Office of Child Support


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