[Federal Register Volume 76, Number 203 (Thursday, October 20, 2011)]
[Rules and Regulations]
[Pages 65107-65109]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-27221]


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SOCIAL SECURITY ADMINISTRATION

20 CFR Parts 404, 408, 416, and 422

[Docket No. SSA-2010-0010]
RIN 0960-AH19


Recovery of Delinquent Debts--Treasury Offset Program 
Enhancements

AGENCY: Social Security Administration.

ACTION: Final rule.

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SUMMARY: We are amending our Tax Refund Offset (TRO) and Administrative 
Offset regulations. We are conforming our regulations to those of the 
Department of the Treasury (Treasury) for the following reasons: 
Treasury removed the 10-year limitation to collect delinquent debts 
owed the United States by reducing eligible Federal payments, and more 
States are participating in reciprocal agreements with Treasury to 
offset State payments, including tax refunds to reduce or extinguish a 
federally owed debt. These changes will allow us to collect additional 
Federal debt.

DATES: These rules are effective November 21, 2011.

FOR FURTHER INFORMATION CONTACT: Jennifer C. Pendleton, Office of 
Payment and Recovery Policy, Social Security Administration, 6401 
Security Boulevard, Baltimore, MD 21235-6401, (410) 965-5652. For 
information on amendments to 20 CFR Part 408, please contact: Benjamin 
Franco, Office of International Programs, Social Security 
Administration, 6401 Security Boulevard, Baltimore, MD 21235-6401, 
(410) 965-7342. For information on eligibility or filing for benefits, 
call our national toll-free number, 1-800-772-1213 or TTY 1-800-325-
0778, or visit our Internet site, Social Security Online, at http://www.socialsecurity.gov.

SUPPLEMENTARY INFORMATION: 

Background

    We are making final the rule for recovery of delinquent debts that 
we proposed in a Notice of Proposed Rule Making (NPRM) published in the 
Federal Register on March 2, 2011 (76 FR 11402). The preamble to the 
NPRM discussed the changes from the current rules and our reasons for 
proposing those changes. To the extent that we are adopting the 
proposed rule as published, we are not repeating that information here. 
Interested readers may refer to the preamble to the NPRM.\1\
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    \1\ The NPRM is available at http://www.regulations.gov/#!documentDetail;D=SSA-2010-0010-0001.
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Changes to Our Regulations

    We are changing our regulations to conform to Treasury's 
regulations. In addition to collecting non-tax debts beyond the 
original 10-year statute of limitations, we will collect delinquent 
overpayments under titles II, VIII, and XVI by offset of various State 
payments, including State tax refunds. Debt Collection Improvement Act 
(DCIA) of 1996, Public Law 104-134, 110 Stat. 1321-358 et seq. (April 
26, 1996); 31 U.S.C. 3716; 31 CFR 285.6.
    Therefore, we are changing Title 20 Sec. Sec.  404.520, 404.521, 
408.940, 408.941, 416.580, 416.581, and 422.310. Under these sections, 
we notify the overpaid person and refer overpayments to Treasury for 
tax refund and administrative offset.

Public Comments on the NPRM

    In the NPRM, we provided the public a 60-day comment period, which 
ended on May 2, 2011. We received two public comments from individuals. 
Since the comments were long, we have summarized and paraphrased them. 
We are responding to the significant issues raised by the commenters 
that were within the scope of this rule.
    Comment: One commenter wanted to make sure that our regulations are 
written with understandable language.
    Response: We are committed to writing our documents clearly and 
welcome feedback if the public does not believe that our documents are 
clear.
    Comment: Another commenter agreed with our proposed rule and 
suggested that individuals be given ample notice before monies are 
reclaimed and that individuals be thoroughly informed before entering 
into a contract that might fall under this rule.
    Response: Before referring a person for offset under these 
sections, we will give him or her at least 60 days prior notice in 
accordance with Sec. Sec.  404.521, 408.941, 416.581, and 422.310.

[[Page 65108]]

Regulatory Procedures

Executive Order 12866 as Supplemented by Executive Order 13563

    We consulted with the Office of Management and Budget (OMB) and 
determined that this final rule meets the criteria for a significant 
regulatory action under Executive Order 12866 as supplemented by 
Executive Order 13563. Thus, OMB reviewed the final rule.

Regulatory Flexibility Act

    We certify that this final rule will not have a significant 
economic impact on a substantial number of small entities because it 
applies to individuals only. Thus, a regulatory flexibility analysis is 
not required under the Regulatory Flexibility Act, as amended.

Paperwork Reduction Act

    This rule does not create any new or affect any existing 
collections and does not require OMB approval under the Paperwork 
Reduction Act.

List of Subjects

20 CFR Part 404

    Administrative practice and procedure, Blind, Disability benefits, 
Income taxes, Old-Age, Survivors, and Disability Insurance, Reporting 
and recordkeeping requirements, Social Security.

20 CFR Part 408

    Administrative practice and procedure; Aged; Reporting and 
recordkeeping requirements; Social Security; Supplemental Security 
Income (SSI); Veterans.

20 CFR Part 416

    Administrative practice and procedure, Reporting and recordkeeping 
requirements, Supplemental Security Income (SSI).

20 CFR Part 422

    Administrative practice and procedure, Organization and functions 
(Government agencies), Reporting and recordkeeping requirements, Social 
Security.

Michael J. Astrue,
Commissioner of Social Security.

    For the reasons set out in the preamble, we are amending 20 CFR 
chapter III, parts 404, 408, 416, and 422 as set forth below:

PART 404--FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE 
(1950- )

Subpart F--[Amended]

0
1. The authority citation for subpart F of part 404 is revised to read 
as follows:

    Authority:  Secs. 204, 205(a), 702(a)(5), and 1147 of the Social 
Security Act (42 U.S.C. 404, 405(a), 902(a)(5), and 1320b-17); 31 
U.S.C. 3716; 31 U.S.C. 3720A.


0
2. Amend Sec.  404.520(b) in the second sentence by removing the word 
``individuals'' and adding in its place the word ``persons'' and by 
revising the third sentence to read as follows:


Sec.  404.520  Referral of overpayments to the Department of the 
Treasury for tax refund offset--General.

* * * * *
    (b) * * * We will refer overpayments to the Department of the 
Treasury for offset against Federal tax refunds regardless of the 
length of time the debts have been outstanding.

0
3. Amend Sec.  404.521 by revising the section heading, introductory 
text, and paragraphs (a) and (b), and in paragraph (e) by removing the 
word ``individual'' in two places and adding in its place ``person''.


Sec.  404.521  Notice to overpaid persons.

    Before we request the collection of an overpayment by reduction of 
Federal and State income tax refunds, we will send a written notice of 
intent to the overpaid person. In our notice of intent to collect an 
overpayment through tax refund offset, we will state:
    (a) The amount of the overpayment; and
    (b) That we will collect the overpayment by requesting that the 
Department of the Treasury reduce any amounts payable to the overpaid 
person as refunds of Federal and State income taxes by an amount equal 
to the amount of the overpayment unless, within 60 calendar days from 
the date of our notice, the overpaid person:
    (1) Repays the overpayment in full; or
    (2) Provides evidence to us at the address given in our notice that 
the overpayment is not past due or legally enforceable; or
    (3) Asks us to waive collection of the overpayment under section 
204(b) of the Act.
* * * * *

PART 408--SPECIAL BENEFITS FOR CERTAIN WORLD WAR II VETERANS

Subpart I--[Amended]

0
4. The authority citation for subpart I of part 408 is revised to read 
as follows:

    Authority:  Secs. 702(a)(5), 808, and 1147 of the Social 
Security Act (42 U.S.C. 902(a)(5), 1008, and 1320b-17); 31 U.S.C. 
3716; 31 U.S.C. 3720A.


0
5. In Sec.  408.940(b) revise the third sentence to read as follows:


Sec.  408.940  When will we refer an SVB overpayment to the Department 
of the Treasury for tax refund offset?

* * * * *
    (b) * * * We refer overpayments to the Department of the Treasury 
for offset against Federal tax refunds regardless of the amount of time 
the debts have been outstanding.

0
6. In Sec.  408.941 revise the introductory text, and paragraphs (a) 
and (b) to read as follows:


Sec.  408.941  Will we notify you before we refer an SVB overpayment 
for tax refund offset?

    Before we request that an overpayment be collected by reduction of 
Federal and State income tax refunds, we will send a written notice of 
our action to the overpaid person. In our notice of intent to collect 
an overpayment through tax refund offset, we will state:
    (a) The amount of the overpayment; and
    (b) That we will collect the overpayment by requesting that the 
Department of the Treasury reduce any amounts payable to the overpaid 
person as refunds of Federal and State income taxes by an amount equal 
to the amount of the overpayment unless, within 60 calendar days from 
the date of our notice, the overpaid person:
    (1) Repays the overpayment in full; or
    (2) Provides evidence to us at the address given in our notice that 
the overpayment is not past due or legally enforceable; or
    (3) Asks us to waive collection of the overpayment under section 
204(b) of the Act.
* * * * *

PART 416--SUPPLEMENTAL SECURITY INCOME FOR THE AGED, BLIND, AND 
DISABLED

Subpart E--[Amended]

0
7. The authority citation for subpart E of part 416 is amended to read 
as follows:

    Authority:  Secs. 702(a)(5), 1147, 1601, 1602, 1611(c) and (e), 
and 1631(a)-(d) and (g) of the Social Security Act (42 U.S.C. 
902(a)(5), 1320b-17, 1381, 1381a, 1382(c) and (e), and 1383(a)-(d) 
and (g)); 31 U.S.C. 3716; 31 U.S.C. 3720A.

0
8. Amend Sec.  416.580(b) by removing the word ``individuals'' in the 
second

[[Page 65109]]

sentence and adding in its place ``persons'' and by revising the last 
sentence to read as follows:


Sec.  416.580  Referral of overpayments to the Department of the 
Treasury for tax refund offset--General.

* * * * *
    (b) * * * We refer overpayments to the Department of the Treasury 
for offset against Federal tax refunds regardless of the amount of time 
the debts have been outstanding.

0
9. Amend Sec.  416.581 by revising the section heading, the 
introductory text, and paragraphs (a) and (b), and in paragraph (e), by 
removing the word ``individual'' in two places and adding in its place 
``person''.


Sec.  416.581  Notice to overpaid person.

    We will make a request for collection by reduction of Federal and 
State income tax refunds only after we determine that a person owes an 
overpayment that is past due and provide the overpaid person with 
written notice. Our notice of intent to collect an overpayment through 
tax refund offset will state:
    (a) The amount of the overpayment; and
    (b) That we will collect the overpayment by requesting that the 
Department of the Treasury reduce any amounts payable to the overpaid 
person as refunds of Federal and State income taxes by an amount equal 
to the amount of the overpayment unless, within 60 calendar days from 
the date of our notice, the overpaid person:
    (1) Repays the overpayment in full; or
    (2) Provides evidence to us at the address given in our notice that 
the overpayment is not past due or legally enforceable; or
    (3) Asks us to waive collection of the overpayment under section 
204(b) of the Act.
* * * * *

PART 422--ORGANIZATION AND PROCEDURES

Subpart D--[Amended]

0
10. The authority citation for subpart D of part 422 continues to read 
as follows:

    Authority:  Secs. 204(f), 205(a), 702(a)(5), and 1631(b) of the 
Social Security Act (42 U.S.C. 404(f), 405(a), 902(a)(5), and 
1383(b)); 5 U.S.C. 5514; 31 U.S.C. 3711(e); 31 U.S.C. 3716.

0
11. In Sec.  422.310 revise paragraphs (a)(1) and (b) to read as 
follows:


Sec.  422.310  Collection of overdue debts by administrative offset.

    (a) Referral to the Department of the Treasury for offset. (1) We 
recover overdue debts by offsetting Federal and State payments due the 
debtor through the Treasury Offset Program (TOP). TOP is a Government-
wide delinquent debt matching and payment offset process operated by 
the Department of the Treasury, whereby debts owed to the Federal 
Government are collected by offsetting them against Federal and State 
payments owed the debtor. Federal payments owed the debtor include 
current ``disposable pay,'' defined in 5 CFR 550.1103, owed by the 
Federal Government to a debtor who is an employee of the Federal 
Government. Deducting from such disposable pay to collect an overdue 
debt owed by the employee is called ``Federal salary offset'' in this 
subpart.
* * * * *
    (b) Debts we refer. We refer for administrative offset all 
qualifying debts that meet or exceed the threshold amounts used by the 
Department of the Treasury for collection from State and Federal 
payments, including Federal salaries.
* * * * *
[FR Doc. 2011-27221 Filed 10-19-11; 8:45 am]
BILLING CODE 4191-02-P