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Department of the Interior

Effective Date: 5/12/87

Series: Financial Management

Part 344: Debt Collection

Chapter 7: Disposition of Administratively Uncollectible Debts

Originating Office: Office of Financial Management

7.1 Write-off and Close-out. Bureaus will develop write-off procedures that identify and remove uncollectible accounts from receivables and close-out procedures that cease collection activity in accordance with guidelines outlined in 344 DM 5.

A. Write-off. Appropriate adjustments will be made in the allowance for uncollectible accounts receivable account, accounts written off will be closed, and the debtors= account ledgers will be removed from active bureau files.

B. Close-out. The amount written off will be recorded with debtor identifying information in an IRS referral log and accumulated for the calendar year. IRS Forms 1099-G will be sent to the individuals involved by January 31 of the following year. Amounts $600 or more will be forwarded to the IRS by February 28 of the following year on IRS Fort 1099-G (see I Treasury Financial Manual 3-4000). In addition, bureaus may reinstitute collection action on closed-out accounts if there is subsequent evidence that a debtor has new ability to pay. Thus, it may be necessary for bureaus to maintain subsidiary records of these accounts. Any referral of information to the IRS from records on individual debtors that are subject to the provisions of the Privacy Act of 1974 should be in compliance with the disclosure restrictions of that Act (see 383 DM 7).

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5/12/87 #3441

Replaces 5/12/87 #2735