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As part of the U.S. Department of the Treasury's Financial Management Service, our mission at Debt Management Services (DMS) is to improve the quality of the federal government's financial management by increasing the collection of delinquent debt owed to the government, by providing debt management services to all federal agencies, and by protecting the financial interests of the American taxpayer. DMS also develops and implements governmentwide debt management policies. The Debt Collection Improvement Act of 1996 (DCIA) provides that any non-tax debt or claim owed to the U.S. Government that is 180 days delinquent, with certain exceptions, will be referred to the Department of the Treasury for collection. Debt that is in litigation or foreclosure, with a collection agency or designated federal debt collection center, or that will be disposed of under an asset sales program, is exempt from transfer to the Secretary. The Financial Management Service (FMS) serves as the government's central debt collection agency, managing the government's non-tax delinquent debt portfolio. As a part of FMS, DMS' goal is to provide a broad range of services, to be more responsive to the needs of client agencies, and to bring about more equity and uniformity in how the U.S. Government treats its delinquent debtors. We provide these services through a network linking our own debt collection expertise and capabilities with those of the Federal Program Agencies' Debt Collection Centers, private collection agencies, and the U.S. Department of Justice. One of the key tools used by FMS to collect delinquent debt is the Treasury Offset Program (TOP). Under TOP, FMS matches a database of delinquent debtors against payments disbursed by Treasury, then offsets or withholds federal payments to recipients who also owe delinquent debts. In addition, FMS uses the TOP program to assist states in collecting past due child-support obligations and delinquent state income taxes, and the IRS in collecting tax debt through a continuous levy process. FMS currently offsets OPM retirement, federal income tax refunds, vendor payments, some federal salary payments, Social Security benefit payments, and is in the process of adding the remaining federal salary and non-Treasury-disbursed payments to the TOP system. Continuous Federal Tax Levy Program levy supports IRS efforts to collect delinquent federal tax debts by matching them against federal payments. The tax levy program is authorized under the Taxpayer Relief Act of 1997 and allows the IRS to assess a 15 percent levy on certain federal payments until the debt is satisfied. Another major collection program used by FMS is Cross-Servicing. Federal agencies are required by law to refer debt delinquent more than 180 days old to FMS. FMS attempts to collect the debts using a variety of Cross-Servicing tools. These tools include Treasury demand letters, telephone follow-up, skip tracing, referral of debts for administrative offset and referral of debts to private collection agencies on the governmentwide contract. FMS now provides administrative wage garnishment as another collection tool under Cross-Servicing. Since enactment of the Debt Collection Improvement Act of 1996 (DCIA), FMS has collected about $31 billion in delinquent debt. Since FMS was given responsibility for centralized collection of debt, we have sharply increased collections through program changes, adding numerous payment streams and categories of debt. We have also continued working with agencies to ensure timely referral of debts more than 180 days past due. In fiscal year 2003, FMS collected more than $3 billion in delinquent debt owed to the federal government, including $1.5 billion in past due child support, $1.3 billion in federal non-tax debt; and nearly $258 million in State and federal tax debt. In fiscal year 2004 thru July, FMS collected more than $2.87 billion in delinquent debt owed to the federal government, including $1.45 billion in past due child support, $1.1 billion in federal non-tax debt; and nearly $297 million in State and federal tax debt. Debt Collection Services
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