CCA 200927033: Administrative offset can collect a county’s federal non-tax debt without a judgment

Plain-English summary

Chief Counsel answered a question about federal offsets affecting IRS lien-recording fees paid to a county. The email explains that the offset concerns non-tax debt and that the notice identifies the federal agency owed money by a county agency. Before collecting by offset, that agency must provide notice of the claim and proposed offset, access to relevant records, an opportunity for agency review, and an opportunity to arrange repayment. The county may dispute the matter in court, but a court judgment is not required before administrative offset.

Ruling snapshot

• Question: Must the government obtain a judgment before using administrative offset to collect the county’s non-tax debt?
• Outcome: Advice given: no prior judgment is required, but the stated notice and review protections apply
• Key authorities: 31 U.S.C. § 3711(g)(1)(A), (B); Debt Collection Improvement Act

Full text (IRS public release)

ID: CCA-511435-09 Number: 200927033
Office: ----------
Release Date: 7/2/2009

UILC: 6323.01-00

From: --------------------
Sent: 5/11/09
To: --------------------
Cc:
Subject: FW: IRS Lien Recording Fees and FMS TOPS Offset

Hi -----. According to ------ in her email below, the notice the county recorder receives has the phone number of the federal government agency to which some agency of the county owes the debt. It could be HHS, HUD etc. Offset is for non-tax debts. Once a debt has been delinquent for 180 days it is turned over to the Secretary of the Treasury for appropriate action to collect or terminate collection on the debt or claim. 31 USC 3711(g)(1)(A),(B). Before collection via offset, the agency must give the debtor (county): 1) written notice of the basis and amount of claim, the intention of the agency to collect via administrative offset, and an explanation of the debtor's rights under the DCIA; )2 an oppportunity to inspect and copy the agency's relevant records; 3) an opportunity for an in-agency review of the agency's decision; and 4) an opportunity to execute a written agreement with the agency to repay the debt. After that the debt is submitted for offset. The county can dispute further in court. Since offset is an administrative remedy, a court judgment is not needed prior to offset. Surely the county's attorney or legal department will also have some knowledge of these types of debts. I hope this helps.

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