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TFM Transmittal Letters|
TFM Volume I Table of Contents
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TFM Transmittal Letters|
TFM Volume I Table of Contents
This chapter provides information to Federal program agencies (FPAs) on policies, procedures, and reports issued by the Financial Management Service (FMS) regarding the processing of check reclamations.
Section 7110-Scope and Applicability
FMS is responsible for reclamation of funds on improperly negotiated Treasury checks. This chapter includes reports and guidance to FPAs to assist them in tracking and monitoring the check reclamation process.
Section 7115-Authority
The applicable regulations governing this chapter are:
Section 7120-Definition of Terms
Administrative Fee-Fee assessed to cover administrative costs incurred as a result of delinquent debt.
Administrative Offset-Withholding money payable to a person or held by the Government to satisfy a debt the person owes the Government.
Check(s)-Check(s) drawn on the U.S. Treasury (Treasury).
Delinquent Debt-An overdue debt, including administrative fees, interest, and penalties that a presenting bank owes as a result of the reclamation that is not paid within 60 days from the date on the reclamation ticket.
Financial Institution-Any bank, savings bank, savings and loan association, Federal or State chartered credit union, or similar institution.
Interest-Charge assessed when a debt is considered delinquent for 60 days. The interest rate assessed is that of the current value of funds to Treasury; that is, the Treasury tax and loan rate.
Partial Credit-Funds received on check reclamations that do not cover the total outstanding balance of principal, interest charge, penalty charge, and administrative fee.
Penalty-Charge assessed after a debt is delinquent for more than 90 calendar days. The rate is set at 6 percent per annum.
Receivable-A debt owed to the Government.
Reclamation-A demand made by Treasury for refund of the amount of a check payment.
Reclamation Date-The date that the reclamation ticket (request for refund) was prepared.
Section 7125-Check Reclamations
FMS reclaims on improperly negotiated Treasury checks, as provided for in 31 CFR Part 240.4. When FMS receives a credit that equals full principal, FMS will forward the credit to the FPA if the FPA is holding the receivable.
FMS forwards partial credits received to the FPA with an indicator that the credit is partial. FMS will continue collection action and forward the balance to the FPA when received. FMS processes credits daily.
Section 7130-Interest, Penalty Charges, and Administrative Fees
Interest on any unpaid reclamation starts accruing on the 61st day after the reclamation date. FMS also assesses an administrative fee at that time. The administrative fee is calculated in accordance with the requirements of the Federal Claims Collection Standards.
FMS charges a penalty on any reclamation that remains delinquent over 90 calendar days. FMS may refer any reclamation that is unpaid for 120 calendar days after the reclamation date for administrative offset. If interest, penalty charges, and administrative fees were collected, FMS deposits those charges and fees monthly into Treasury's General Account 20A8183. FMS' Accounts Branch reports the activity for the accounts on the SF 224: Statement of Transactions.
Section 7135-Collection Action
FMS will continue collection action on check reclamations until the balance outstanding becomes $25 or less or all collection steps have been attempted, and the cost of further collection would likely exceed the amount to be recovered.
FMS does not terminate collection action if a protest or legal issue is pending resolution. FMS refunds any amount recovered on FPA receivables to the FPA.
Section 7140-Electronic Transmission of Partial Credits
When only a partial credit is collected, the indicator "CP" (credit partial) appears on the Government On-Line Accounting Link System (GOALS II) record. The indicator "CP" displays in the "status code" field for the detail records in GOALS. For the U.S. Department of Veterans Affairs, U.S. Railroad Retirement Board, Internal Revenue Service (IRS), and Office of Personnel Management that receive their data via FMSNet, the indicator "CP" appears in the record layout at position 177 and 178. Partial credits for the Social Security Administration (SSA) are transferred to SSA by an Intra-governmental Payment and Collection (IPAC) credit document.
Section 7145- Abandoned Reclamations
FMS notifies FPAs that a reclamation was abandoned. In addition to the initial notification that a reclamation was abandoned, each month FMS reports to FPAs reclamations abandoned during the accounting month (see Appendix 1).
Section 7150-Reporting to the IRS on IRS Form 1099-C: Cancellation of Debt
FPAs are responsible for reporting only the principal amount of their uncollectible receivables to the IRS on IRS Form 1099-C. To assist FPAs, FMS sends the FPAs a report on the uncollected principal amount of receivables, at the end of the calendar year (see Appendix 2) and again at the end of February with any modifications to the data (see Appendix 3).
FMS reports to the IRS:
Direct questions concerning this chapter to:
Reclamation Branch
Financial Processing Division
Financial Operations
Financial Management Service
Department of the Treasury
3700 East-West Highway, Room 700D
Hyattsville, MD 20782
Telephone: 202-874-7770
Appendices are available in the PDF version of this chapter only.
1. Purpose
This transmittal letter releases revised I TFM 4-7100: Check Reclamations. This chapter provides information on check reclamation policies and the Financial Management Service's reporting procedures for processing check reclamations.
2. Page Changes
| Remove | Insert |
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| Table of Contents for Part 4 (T/L 624) I TFM 4-7100 (T/L 579) |
Table of Contents for Part 4 I TFM 4-7100 |
3. Effective Date
This transmittal letter is effective immediately.
4. Inquiries
Direct questions concerning this transmittal letter to:
Reclamation Branch
Financial Processing Division
Financial Operations
Financial Management Service
Department of the Treasury
3700 East-West Highway, Room 700D
Hyattsville, MD 20782
Telephone: 202-874-7770
Date: January 18, 2006
Richard L. Gregg
Commissioner
