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The Tax Payer Relief Act of 1997 authori...

The Financial Management Service (FMS) is a bureau of the Department of the Treasury, to provide a centralized debt collection service to most federal agencies. The FMS has begun using two Congressionally mandated federal debt collection programs. One is devised to collect delinquent non-tax debt by neutralizing federal payments and the other is to gather delinquent tax debt from those people who acquire federal payments.

The Tax Payer Relief Act of 1997 authorized the IRS to gather delinquent tax debts from folks and firms that receive federal payments, by levying up to 15% of each payment until the debt is paid.

Just before the IRS transmits an electric file to the FMS, the IRS will send each and every tax debtor a notice by certified mail that will include the tax bill, a statement of the intent to levy, an explanation of the debtor's rights to appeal, and an IRS phone number to inquiries and assistance. The intent to levy notice will also inform the debtor that if arrangements are made to repay the debt within thirty days of the notice, the levy will be dismissed.

To those debtors who get Social Security advantages, a second notice will be sent as an chance to make payment arrangements to repay the debt and to steer clear of an IRS levy. As the payments are produced, the FMS will send a notice to the debtor with explanation of the decreased payment, along with contacting the IRS to answer any questions with regards to past debt. A debtor can make payment arrangements through the IRS at any time, whether or not its just before a tax levy is issued or soon after the tax levy begins, to be released from an IRS tax levy.

Federal tax debts will be collected by FMS by means of The Treasury Offset Plan (Prime), a plan that is also utilised to gather non-tax debt. The Top database, which is maintained by FMS, involves delinquent debtor information that has been submitted by federal agencies. As with the tax levy program, the IRS will supply the FMS with an electronic file containing tax debt information to be compiled in the Prime database.

FMS will match the federal payment information with the Top database and the speak to the IRS if they find any matches that would particularly identify any debtors that are recipients of Social Safety benefit payments. The IRS will then send a notice of levy to the FMS to decrease matched payments continuously at a price of 15% until the debt is paid, until other repayment arrangements are produced, or till the expiration of the statutory collection period.

In February of 2002, the FMS started minimizing the IRS garnishment amounts of Social Safety beneficiaries who owed delinquent federal tax debts, by sending the IRS the levied amounts and sending the balance of the payments to the tax payer. bad debt collection