dcl9745.htm

Tax Offset Submittal Schedule for PY98

DCL-97-45 August 8, 1997

TO ALL STATE IV-D DIRECTORS

Re: Instructions for Submittals for Administrative Offset/Federal Tax Refund Offset and Passport Denial

Dear Colleague:

The Office of Child Support Enforcement (OCSE) and the Department of Treasury, Financial Management Services (FMS)are currently developing procedures for the implementation of the Debt Collection Act of 1996 and Executive Order 13019. Effective January 1998 the Federal Tax Refund Offset program will be merged with the Administrative Offset program at FMS. Currently, there are several issues that OCSE and FMS are trying to resolve. As soon as we have definite answers for these issues we will let the States know. Also in January cases with arrears of $5,000 or greater will be submitted to the State Department for passport denial.

In the interim for the September submittals, there will be no format changes and the schedule will remain similar to that of last year except for States mailing their own pre-offset notices (See enclosure). New format changes will take place in January 1998. Some of the changes effective in January are indicated in the attachments. You will be notified of other changes once FMS finalizes it's procedures.

Attached, please find instructions pertaining to the submittal of cases in September including the process which will be used for passport denial. If you have any questions, please contact the Special Collection Unit on (202) 401-9389.

Sincerely,

_______________________
David Gray Ross
Deputy Director
Office of Child Support
Enforcement

INSTRUCTIONS FOR SUBMITTAL FOR FEDERAL TAX OFFSET/ADMINISTRATIVE OFFSET AND PASSPORT DENIAL

States must complete a new certification form (See attachment A "Certification") at the time of final submittal. States should also be aware that a new pre-offset notice has been developed providing due process for Administrative offsets and passport denial as well as Federal Tax Refund offsets. The language used in the new pre-offset notice is attached (see attachment B "Pre- Offset notice"). This is a copy of the notice that OCSE will mail on behalf of those States requesting the service. States mailing their own pre-offset notices are encouraged to use this notice as a guide. A "one time" pre-offset notice has been developed by OCSE and FMS. The notice provides due process to the obligor for Federal Tax Refund Offset, Administrative Offset and denial of passport on appropriate cases. The notice advises the Obligor that if his/her debt increases so may the amount he/she is offset. Unless your State law requires additional notice, there is no Federal requirement to issue more than one pre-offset notice.

States already participating in the Administrative Offset program:

Currently 10 States are participating in this year's Administrative Offset program and we anticipate a few more will come on board this year. States participating in Administrative Offset this year will not have to resubmit those cases for certification forwarded to FMS this fall. If however, these States have additional cases eligible for offset, they should be submitted using the current format and schedule. Beginning in January 1998, States will be able to modify upward these cases. Again, unless your State requires another notice, there is no Federal requirement to issue another pre-offset notice for these cases.

States participating in the 1997 Administrative Offset program will receive two collection tapes; one tape will be marked "TAX OFFSET" and the other will be marked "ADMINISTRATIVE OFFSET." Additionally, for 1997 on the Monthly collection/address report tape specifications form, (see attachment C 1997 "Monthly collection/address report tape specifications") the offset indicators will be in positions 213-215. In 1998 States will receive a single collection tape with the same indicators for Tax Refund Offset or Administrative Offset. For 1998 the offset indicators will be in positions 217-219. (see attachment D "1998 Monthly collection/address report tape specifications").

All States will have the ability to increase arrearages and add new cases on a continual basis beginning January, 1998.

PROCESSING YEAR 1998 SUBMITTAL PROCEDURES

States will have three options when submitting cases this fall for Processing Year 1998.

Option One: States may submit cases for Federal Tax Refund offset only and not initially subject them to Administrative offset using the current submittal format. When the State is prepared to accept Administrative offsets, OCSE should be notified and the appropriate action will be taken to activate Administrative offsets. The normal Federal Tax Refund offset schedule would begin in February 1998.

Option Two: States may submit cases for both Federal Tax Refund offset and Administrative offset using the current submittal format. These States may receive Administrative offsets as early as January 1998 and Federal Tax Refund offsets would begin as usual, in February 1998.

Option Three: States currently participating in the Administrative offset program will not have to resubmit cases that are already at FMS but may submit new cases this fall using the current submittal format. These case would be subjected to both Federal Tax Refund and Administrative offsets.

IT IS IMPORTANT THAT STATES INDICATE ON THE ENCLOSED CERTIFICATION FORM WHICH OPTION IS APPROPRIATE FOR THEIR SUBMITTALS.

For States who issue their own pre-offset notices, OCSE will forward the addresses to those States as we receive the addresses from IRS.

It is important that all cases are submitted with address because FMS will not accept any case that does not have an address. States issuing their own notices have two options for providing addresses. At the time States submit their final certification file to OCSE, they may use Attachment E "Address Tape Specifications", to send the obligor's address. The second would take place after January 15, 1998 using Attachment F "Update Tape Specifications", to send the Obligor's address.

PASSPORT DENIAL PROCESS

All IV-D TANF and non-TANF cases that are certified by the State agencies as having a child support arrearage of $5,000 or more will be submitted to the Department of State for passport denial.

This is a seamless system, cases will be automaticly extracted from the certified file submitted for Tax Refund/Administrative Offset which meet the $5,000 or more threshold. There is no effort involved in this process on the part of the State agencies.

These cases will be submitted to SSA (name and SSN) and SSA will create a return file with name, SSN, date and place of birth and gender. The file will be forwarded to the State Department and the State Department will clear every passport application against this file and will deny a passport for each positively identified individual. The State Department will provide each denied applicant with a letter of denial, citing the statute and providing the applicant with a list of State CSE contact phone numbers. The letter will indicate that a passport shall not be issued unless the applicant provides the Passport agency with a letter (see attachment G "Withdrawal of Passport Denial") of satisfaction from the State CSE agency. This notice should be used for those cases which must be deleted on an urgent basis.

In addition, Beginning in January States will be able to exclude or delete individual cases from passport denial by submitting a transaction code in the weekly up-date transmittal (attachment E).

OCSE will submit on a weekly basis a file containing new cases and deletions to the State Department.

Note it is important that State Child Support Enforcement agencies maintain a current telephone listing and forward updates to this listing as changes occur to OCSE on fax number (202) 401- 5553.

The following are important dates for the State to note:

July 28 - August 14:

Final test tape period

OCSE will receive the results back the week of September 1, 1997 and forward the results to those States doing their own notices immediately thereafter.

Those cases that IRS returns as unaccountable will be sent to the Social Security Administration (SSA) to be run through their Enumeration Verification System (EVS). OCSE will return any corrected SSNs to the State.

1st week of August:

For those States who issue their own pre-offset notices, OCSE will provide addresses for those 1997 processing year cases that did not have a collection. This will assist those States in building up their address file in order to send out their pre-offset notices.

Those States that OCSE will issue pre-offset notices for this fall should fax an estimate of the number of notices to be issued to OCSE on fax (202) 401-9389. The cost for these notices will be billed to the States in December 1997 and payment will be due in January 1998. The cost will be approximately $0.45 per pre-offset notice.

IV-D Director's certification for the pre-offset notices should be forwarded to the appropriate ACF Regional office. It is the responsibility of the regional offices to review the pre-offset notices. A copy of the pre-offset notice should be forwarded to:

Administration for Children and Families
Office of Child Support Enforcement
Special Collections Unit - Room 484
370 L Enfant Promenade, S.W.
Washington, D.C. 20447

August 25:

Earliest date for submitting processing year 1998 final submittal tapes to OCSE. If OCSE is mailing your State's pre-offset notices, please ensure that all counties or local jurisdictions have been included in the submittal.

States are to provide OCSE with information for the offset notice. See exhibits M, R, S, and X.

States must provide OCSE with information for the monthly wire transfer of Federal Tax Refund Offset collections via the automated clearing house (ACH) (See exhibit BB in AT-96-05 dated August 15, 1996.)

The local and State address tape or change sheet(s)are due at this time at OCSE . Only changes since August 1996 to local addresses or phone numbers are required by the FMS. Changes may be made throughout the processing year. If there are more than 5 changes at any given time a tape or cartridge must be submitted, otherwise, address change sheet will suffice for each change. Please note that a State's final submittal tape cannot be processed until we have received and processed local address changes.

September 16:

This is the deadline for final submittal tapes for processing >year 1998 from the States that have OCSE issue their pre-offset notices. States that participated in the 1997 Administrative Offset program will not have to resubmit cases already forwarded to FMS. If however, these States have additional cases eligible for offset, these cases should be submitted at this time. Tapes are also due from States that issue their own notices but wish to be included in the earlier filing date. THERE WILL BE NO EXCEPTIONS to this deadline because OCSE must submit the cases to IRS for additional addresses that we do not have on file and we must abide by IRS schedule to obtain them.

IT IS EXTREMELY IMPORTANT THAT ALL FILES SENT TO OCSE VIA CONNECT DIRECT/NETWORK DATA MOVER,(NDM) TAPE OR CARTRIDGE ARE ACCURATE AND COMPLETE BECAUSE OF THE LARGE VOLUME OF PRE-OFFSET NOTICES THAT OCSE WILL MAIL IN THE NEXT FIVE WEEKS.

September 23 - October 31:

The actual mailing of processing year 1998 pre-offset notices occurs during this period (notices must be mailed by October 31). Approximately 3 million pre-offset notices will be mailed during this period. Again the language used in the new pre-offset notice is attached (see attached B "NOTICE"). This is a copy of the notice that OCSE will mail on behalf of those States requesting the service. States mailing their own pre-offset notices are encouraged to use this notice as a guide.

October - December 6:

Phase I for 1998 updates (process against OCSE master file before final referral to FMS). Please remember States that submit after the September 16 deadline, mail their own pre-offset notices, and choose the December 2 deadline instead of the September 16 deadline, should not send in updates at this time because OCSE has no master file of cases to process the updates against. States that choose the later submittal date are responsible for processing all updates in-house before their final submittal tape is sent to OCSE.

December 2:

Processing year 1998 final submittal tapes are due from States issuing their own pre-offset notices.

December 8:

Phase II update begins after January 15, for processing year 1998 updates. However, please remember that no processing is done at FMS from approximately the second week of December until approximately the third week in January. Cases sent for update during this time are held by OCSE until the first updates are processed at FMS after January 15.

IT IS EXTREMELY IMPORTANT THAT STATES TRACK ALL UPDATES FORWARDED TO OCSE DURING THIS TIME PERIOD BECAUSE THE RESULTS WILL BE CONSOLIDATED INTO ONE REPORT AND FORWARDED TO THE STATES ON THE FIRST UPDATE CYCLE RETURNED TO THE STATES IN JANUARY 1998. IF THERE ARE ANY DISCREPANCIES PLEASE CONTACT THE SPECIAL COLLECTIONS UNIT IMMEDIATELY.

December 15

OCSE certification tape due at FMS

Cutoff date for reporting process year 1997 updates (deletions/modifications) for the current processing year. There is no cutoff for State payments. However, these too will be held until update processing begins later in January.

Those States that OCSE processes pre-offset notices for will be billed for the actual amount owed at this time.

February - 1st week

Those cases that have been certified by the FMS will be returned to the States by OCSE. This will be referred to as the State's certified master file.

February - 3rd week

Cases that were not certified (unaccountables) will be run through the Social Security Administration's (SSA) Enumeration Verification System (EVS) in an attempt to correct as many of the Social Security Number problems as possible. A file of the corrected cases and those still listed as unaccountable will be returned to the States for correction and resubmitted the following processing year or for further review if a corrected number was not provided.

February - December 1998:

Monthly collection reports to States.

If you have any questions on how the process works or with the dates listed, please feel free to contact the Special Collections Unit on (202) 401-9389.

Note that except for these Instructions, the attachments, enclosures, and exhibits mentioned above are not included in this version of the DCL.