dcl9626.htm

Tax Refund Offset - Fourth Collection Report for Processing Year 1995

MAY 23, 1996 DC-96-26

TO ALL STATE IV-D DIRECTORS

We are very please to forward to you the fourth Collection/Adjustment/Address and corresponding Name Change reports for the 1996 Federal Tax Refund Offset Program. Enclosed is the collection report representing the tax refund offsets for the month of May 1996 less the $5.71 per offset service fee and any adjustments made during this period for the 1991 through 1996 processing years.

The net collection total for May 1996 for 414,666 offsets is $315,040,748 as compared to 291,817 offsets for $198,548,173 in May 1995. The year-to-date total through May 1996 is $864,476,428 as compared to $561,025,550 for the same time period in processing year 1995 and $620,322,758 in processing year 1994. We have already surpassed last year's record setting collection total of over $829 million with seven months remaining this year. The low year-to-date total for processing year 1995 was attributed to the IRS performing an audit on those refunds involving earned income tax credits which caused a processing delay of from six to eight weeks on these refunds.

The net check amount for each month's collection report will no longer be sent via Electronic Funds Transfer (EFT) as we stated last month. As a reminder, the monthly transfer of funds for the collection report will be accomplished through the Automated Clearing House (ACH). This transfer is very similar to the way payroll checks are sent to banks. It will be deposited directly into your State's account. All future transfers will be accomplished on the last work day of the month via ACH with the exception of the December report which will be transferred on approximately January 10th.

The transfer through the Automated Clearing House is scheduled to be accomplished on May 31, 1996. Please make the appropriate program staff aware of this change and the date on which the monthly transfers will now occur. When program staff make inquiries with your financial institution concerning the monthly transfer, please ensure that questions are directed to the ACH section and not the fed line section. If you have any questions pertaining to the tax refund offset program, please feel free to contact the Special Collections Unit at (202) 401-9389.

Sincerely,

David Gray Ross

Deputy Director

Office of Child Support

Enforcement

Enclosure