| inancial Management Service (FMS) is a bureau of | | | | payments are made, the FMS will send a notice |
| the Department of the Treasury, to provide a | | | | to the debtor with explanation of the reduced |
| centralized debt collection service to most federal | | | | payment, along with contacting the IRS to answer |
| agencies. The FMS has begun utilizing two | | | | any questions regarding past debt. A debtor can |
| Congressionally mandated federal debt collection | | | | make payment arrangements through the IRS at |
| programs. One is devised to collect delinquent | | | | any time, whether its before a tax levy is issued |
| non-tax debt by neutralizing federal payments and | | | | or after the tax levy begins, to be released from |
| the other is to collect delinquent tax debt from | | | | an IRS tax levy. |
| those individuals who receive federal payments. | | | | Federal tax debts will be collected by FMS through |
| The Tax Payer Relief Act of 1997 authorized the | | | | The Treasury Offset Program (TOP), a program |
| IRS to collect delinquent tax debts from individuals | | | | that is also used to collect non-tax debt. The TOP |
| and businesses that receive federal payments, by | | | | database, which is maintained by FMS, includes |
| levying up to 15% of each payment until the debt | | | | delinquent debtor information that has been |
| is paid. | | | | submitted by federal agencies. As with the tax |
| Before the IRS transmits an electric file to the | | | | levy program, the IRS will supply the FMS with an |
| FMS, the IRS will send each tax debtor a notice | | | | electronic file containing tax debt information to be |
| by certified mail that will include the tax bill, a | | | | compiled in the TOP database. |
| statement of the intent to levy, an explanation of | | | | FMS will match the federal payment information |
| the debtor's rights to appeal, and an IRS phone | | | | with the TOP database and the contact the IRS if |
| number to inquiries and assistance. The intent to | | | | they find any matches that would specifically |
| levy notice will also inform the debtor that if | | | | identify any debtors that are recipients of Social |
| arrangements are made to repay the debt within | | | | Security benefit payments. The IRS will then send |
| thirty days of the notice, the levy will be | | | | a notice of levy to the FMS to reduce matched |
| dismissed. | | | | payments continuously at a rate of 15% until the |
| To those debtors who receive Social Security | | | | debt is paid, until other repayment arrangements |
| benefits, a second notice will be sent as an | | | | are made, or until the expiration of the statutory |
| opportunity to make payment arrangements to | | | | collection period. |
| repay the debt and to avoid an IRS levy. As the | | | | |