§ 400.141Internal Revenue Service (IRS) Tax Refund Offset.
Under the provisions of 31 U.S.C. 3720A, the (IRS) may be requested to collect a legally enforceable debt owing to any Federal agency by offset against a taxpayer's Federal income tax refund. This section provides policies and procedures to implement IRS tax refund offsets in accordance with the provisions set forth in § 301.6402-6T of 26 CFR chapter I.
(a) Any person who is indebted to the Federal Crop Insurance Corporation (FCIC) is entitled to the extent of FCIC's administrative due process including review and appeal of the debt under the Appeal Regulations in 7 CFR part 400, subpart J.
(b) If, after such administrative due process is exhausted, the debt is still outstanding with no other means of collection, the debtor will be notified by letter of FCIC's intention to refer such debt to the IRS for collection by tax refund offset. The notification letter will inform the debtor that their account is delinquent and that IRS will be requested to reduce the amount of any tax refund check due the debtor by the amount of the deliquency. The debtor will be given 60 days in which to write to the Manager, FCIC, providing written evidence that the debt is not legally enforceable. FCIC will refer the debt to IRS for collection by offset after the 60-day period if no response is received from the debtor. Decisions made under the provisions of this section are not appealable under the provisions of the Appeal Regulations in 7 CFR part 400, subpart J.
(c) If the debtor has requested a review, and has provided written evidence that the debt is not legally enforceable, the Manager, with the assistance of the Office of General Counsel, USDA, will review the debtor's reasons for believing that the debt is not legally enforceable. The debtor will then be notified of the results of the review.
(d)FCIC will notify IRS of those accounts against which offset action is to be taken.
(e) If, during the period of review, the debtor pays the debt in full, the collection of the debt by tax refund offset procedure will be halted. Changes in debtor status that eliminate the debtor from IRS offset will be reported to IRS by FCIC and the debtor's refund will not be offset.
(f) Amounts offset for delinquent debt which are later found to be not owed to FCIC, will be promptly refunded.
(g) Debtors will not be subject to IRS offset for any of the following reasons:
(1) Debtors who are discharged in bankruptcy or who are under the jurisdiction of a bankruptcy court;
(2) Debtors who are employed by the Federal Government;
(3) Debtors whose cases are in suspense because of actions pending by or taken by FCIC;
(4) Debtors who have not provided a Social Security Number (SSN) and no SSN can be obtained;
(5) Debtors whose indebtedness is less than $25;
(6) Debtors whose account is more than ten (10) years delinquent; except in the case of a judgment debt; or