[Federal Register Volume 62, Number 169 (Tuesday, September 2, 1997)]
[Proposed Rules]
[Pages 46428-46430]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-23179]
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Part V
Department of the Treasury
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Fiscal Service
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31 CFR Part 212
Taxpayer Identifying Number Requirement; Proposed Rule
Federal Register / Vol. 62, No. 169 / Tuesday, September 2, 1997 /
Proposed Rules
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DEPARTMENT OF THE TREASURY
Fiscal Service
31 CFR Part 212
RIN 1510-AA61
Taxpayer Identifying Number Requirement
AGENCY: Financial Management Service, Fiscal Service, Treasury.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The Debt Collection Improvement Act of 1996 (DCIA) requires
that executive agencies include the taxpayer identifying number (TIN)
of each person to whom payment may be made with each payment request
submitted to a disbursing official on a certified voucher. Effective
six months after the date of publication of the final rule, all
disbursing officials will be required to reject any executive agency
payment request that does not include the TIN. This requirement will
ensure that TINs of Federal payment recipients are available to
facilitate debt collection by offset of Federal payments under the
DCIA, and for vendor income reporting to the Internal Revenue Service
(IRS) as mandated by the Internal Revenue Code of 1986 (IRC).
DATES: Comments must be received by November 3, 1997.
ADDRESSES: Comments should be sent to Carolyn M. Austin-Diggs,
Director, Asset Management Policy and Planning Division, Financial
Management Service, U.S. Department of the Treasury, Room 414, 401 14th
Street S.W., Washington, DC 20227.
FOR FURTHER INFORMATION CONTACT: Dean Balamaci (Director, Program
Implementation) at 202-874-6670, Barbara Wiss (Program Specialist) at
202-874-7491, Catherine McHugh (Policy Specialist) at 202-874-7497, or
Laurie Levin (Attorney-Advisor) at 202-874-8615. This document is
available on the Internet home page of the Financial Management
Service: http://www.fms.treas.gov.
SUPPLEMENTARY INFORMATION:
Background
On April 26, 1996, the DCIA was enacted as Chapter 10 of the
Omnibus Consolidated Rescissions and Appropriations Act of 1996, Public
Law 104-134, 110 Stat. 1321-358. A major purpose of the DCIA is to
enhance the government-wide collection of delinquent debts owed to the
Federal Government. Among other things, under the DCIA, an eligible
Federal payment will be reduced or withheld to pay the recipient's
delinquent debt owed to the United States. This process, known as
``offset,'' also may be used to collect delinquent debts owed to
States, including past-due child support.
The Financial Management Service (FMS) is responsible for the
implementation of centralized administrative offset of Federal payments
for the collection of delinquent nontax debt in accordance with the
provisions of the DCIA. In addition, FMS, as the Treasury disbursing
agency, is responsible for the disbursement of public money for the
executive branch. 31 U.S.C. 3321.
Section 31001(y) of the DCIA, codified at 31 U.S.C. 3325(d),
requires that the head of an executive agency include with each
certified voucher submitted to a disbursing official pursuant to 31
U.S.C. 3325(a) the TIN of each person to whom payment may be made under
the voucher. To ensure that agencies comply with this DCIA provision,
which was effective April 26, 1996, FMS is issuing this proposed rule.
Federal agencies are advised that effective six months after the
date of publication of the final rule, all disbursing officials will
reject any executive agency payment request that does not include the
TIN of the person(s) to whom payment may be made, i.e., the payee(s).
For purposes of this proposed rule, ``person'' does not include a
Federal agency.
Payments made by the legislative and judicial branches of the
Federal Government will be included in the offset program, but those
payments are not made by the executive branch and therefore are not
covered by this regulation. We encourage the legislative and judicial
disbursing officers to include the TINs in their payment function, as
it is one of the means to accomplish the administrative offset of
payments to pay delinquent debts.
The 9-digit TIN is an identifier required of all individuals and
businesses that file tax returns in the United States, as described in
section 6109 of the IRC (26 U.S.C. 6109). For purposes of this proposed
rule, taxpayer identification number has the same meaning as taxpayer
identifying number. For individuals who are eligible for a social
security number (SSN), the SSN assigned by the Social Security
Administration serves as the TIN. For resident or nonresident aliens
ineligible for an SSN, the individual taxpayer identification number
(ITIN) assigned by the IRS serves as the TIN. For entities other than
individuals, the employer identification number (EIN) assigned by the
IRS serves as the TIN. Where a payment certifying agency determines
that an individual or entity does not have a TIN and is not required to
have a TIN under any law other than the DCIA certified payment voucher
requirement, payment requests lacking TINs will not be rejected.
The intent of this proposed rule is to ensure that TINs are
included on a certified voucher, as required by 31 U.S.C. 3325(d). The
TIN is necessary for the collection of delinquent debt owed to Federal
agencies and States by administrative offset under the provisions of
the DCIA. The TIN is a critical identifier for matching payment
requests with delinquent nontax debtor information for offset purposes.
When a match occurs, the amount offset from the payment will be applied
to the payee's delinquent debt, to the extent legally allowed. In
addition, Federal agencies need the TIN to comply with vendor income
reporting requirements under the Internal Revenue Code. Interagency
efforts are under way to identify ways to assist Federal agencies in
verifying the accuracy of TIN information provided by a payee. These
efforts do not preclude agencies from complying with the DCIA.
Agencies have been required to furnish the TINs of payment
recipients on all certified vouchers submitted to disbursing officials
since April 26, 1996, the effective date of the DCIA. In its interim
rule creating 31 CFR Part 208, Management of Federal Agency
Disbursements, FMS advised agencies of this DCIA requirement. See 61 FR
39254, July 26, 1996. Prior to the enactment of the DCIA, FMS issued
Treasury Financial Management Bulletin No. 95-10 on August 18, 1995
(TFM Bulletin), which required that the payee's TIN be included on all
certified vouchers for vendor, miscellaneous, and salary payments. The
TFM Bulletin requirement applied to all forms of payment requests
submitted to FMS' Regional Financial Centers. In addition, the TFM
Bulletin required that other disbursing officials conform their systems
to these requirements.
Steps Important to Implementation of the Proposed Rule
This section discusses three (3) primary steps which are important
to the implementation of the proposed rule:
(1) Federal agencies obtain TINs from Federal payment recipients;
(2) To request payments, agencies prepare and certify vouchers; and
(3) Disbursing officials examine vouchers and make payments
accordingly.
(1) Federal agencies obtain TINs from Federal payment recipients.
The
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authority for agencies to collect TINs is found in 31 U.S.C. 7701(c)(1)
or other laws authorizing the collection of TINs. The DCIA requires
that all agencies obtain TINs from persons doing business with the
agency. As previously noted, this requirement does not apply to
payments made to other Federal agencies.
To minimize the burden of compliance with the DCIA requirement to
provide TINs on certified vouchers, FMS encourages agencies to obtain
the TIN when the agency first has direct contact with a person.
Typically, this is when the agency also is obtaining the routing
transit number, account number, and other information needed to make
payments electronically, in accordance with 31 CFR Part 208. For
payments by check, this will occur when the agency is obtaining the
name and address of the payee. There are other advantages to obtaining
the TIN when an agency first has direct contact with a person. For
example, collecting contractor data required for payment requests at
the start of the procurement process enhances the Government's ability
to issue timely payment upon receipt of subsequent invoices.
(2) To request payments, agencies prepare and certify vouchers. To
make a payment, a Federal payment certifying agency prepares a voucher
to authorize disbursement of Federal funds to a recipient. An
authorized official of the payment agency reviews the voucher and
certifies that: The information stated on the voucher and supporting
documents is accurate; the appropriation or fund involved is legally
available for payment; and the services have been rendered, or
advancing funds before services are rendered is legally proper.
Although responsible for the information contained on the voucher, an
authorized official of the payment agency may be relieved from
liability under certain circumstances. For example, an authorized
official may be relieved from liability if the certification was based
on official records and if the official did not know, and could not
have discovered the correct information through reasonable diligence
and inquiry. 31 U.S.C. 3528(b).
As noted above, 31 U.S.C. 3325(d) requires that executive agencies
include with each certified voucher submitted to a disbursing official
the TIN of each person to whom payment may be made under the voucher. A
certified voucher may contain information for a single payment request
or multiple payment requests. A TIN is required for each payment
request. In addition, if an individual payment request has multiple
payees, a TIN is required for each payee.
Because 31 U.S.C. 3325(d) requires that the TIN be included with
executive agency payment requests, a payment request lacking the TIN is
not in proper form, and this proposed rule requires the disbursing
official to reject the payment request.
(3) Disbursing officials examine vouchers and make payments
accordingly. Disbursing officials must reject executive agency payment
requests without TINs. A disbursing official (who in most cases is
different than the certifying official) examines a certified payment
voucher submitted by a payment agency. If the voucher is in proper
form, properly certified and approved, and computed correctly, the
disbursing official makes payments as directed in the voucher. A
disbursing official may reject a voucher which is not in proper form
pursuant to the performance of the disbursing official's duties under
31 U.S.C. 3325(a), or other governing authorities as applicable to
disbursing officials of the Department of Defense. If an individual
payment request is not in proper form, the disbursing official will
reject the payment request in question, not the entire voucher. In
general, to reject a payment request means that the disbursing official
will not issue the payment to the named payee. The disbursing official
will notify the payment certifying agency that the payment request has
been rejected. For the payment to be issued, the certifying agency is
required to resubmit the payment request in proper form.
Pursuant to 31 U.S.C. 3325, an executive agency payment request
which does not contain the TIN is not in proper form. Therefore, for
the reasons discussed above, this proposed rule requires disbursing
officials to reject any executive agency payment request that does not
include the TIN of the payee(s).
This proposed rule applies to Treasury and non-Treasury disbursing
officials. In mandating administrative offset, the DCIA does not
distinguish between Treasury disbursing officials and non-Treasury
disbursing officials. The DCIA directs disbursing officials of the
Department of the Treasury, the Department of Defense, the United
States Postal Service, or any other government corporation, or any
disbursing official of the United States designated by the Secretary of
the Treasury to conduct administrative offset to collect claims owed to
the United States. Therefore, because the TIN is required to conduct
administrative offset, both Treasury and non-Treasury disbursing
officials must reject executive agency payment requests without TINs.
Disbursing officials are not responsible for any liabilities
resulting from the rejection of a certified payment voucher that is not
in proper form under this proposed rule. Certifying agencies may be
responsible for any resulting liabilities depending on the facts and
circumstances surrounding the rejection of the payment voucher. For
example, if a payee has supplied a valid TIN to the certifying agency
and the agency has failed to include the TIN on a certified payment
voucher, the certifying agency may be responsible for any resulting
Prompt Payment Act penalties that accrue. See 31 U.S.C. 3901-3907
(Prompt Payment).
Request for Comments
The public is invited to submit comments on the proposed rule.
Comments received in response to this notice of proposed rulemaking
will be critical in determining exceptions or waivers of the TIN
requirement that may be established for any specific class or type of
payments or payees.
To justify any exceptions or waivers of the TIN requirement,
agencies must provide supportable information on the volume and dollar
value of payments, and on the nature of impediments to compliance.
Agencies should distinguish between operational impediments, such as
the need to update payment systems, and legal impediments, such as
agency regulations or laws prohibiting disclosure of the TIN.
Agencies specifically are invited to comment on the issues
identified below:
The status of agency compliance with the requirement of
the DCIA to furnish TINs with each certified voucher and actions
planned to achieve compliance;
Issues anticipated in connection with furnishing TINs for
any specific class or type of payments or payees;
Issues anticipated due to the rejection of payment
requests which do not include TINs for any specific class or type of
payments or payees;
Issues regarding foreign currency payments, or payments to
foreign governments, foreign nationals employed overseas, or other
specific classes of payees overseas; and
Disbursing official readiness to reject payment requests
which do not include TINs and actions planned to achieve readiness.
Regulatory Analysis
Regulatory Flexibility Act. It is hereby certified that this
regulation will not
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have a significant economic impact on a substantial number of small
entities. Accordingly, a regulatory flexibility analysis is not
required. The DCIA and this regulation require executive agencies to
include the TIN with each certified voucher. Most small entities
already will have a TIN for tax purposes. Furnishing the TIN to
executive agencies will impose little or no burden.
Paperwork Reduction Act. The requirements of the Paperwork
Reduction Act (PRA), 44 U.S.C. 3501 et seq., do not apply to this
proposed rule. The DCIA requirement that agencies provide payees' TINs
on payment vouchers submitted to disbursing officials is not a
collection of information subject to the PRA. The PRA does not apply to
the collection of information from agencies, instrumentalities, or
employees of the United States. 44 U.S.C. 3502(3)(A).
Executive Order (E.O.) 12866. It has been determined that this
regulation is not a significant regulatory action as defined in E.O.
12866.
List of Subjects in 31 CFR Part 212
Administrative practice and procedure, Electronic funds transfers,
Reporting and recordkeeping requirements.
Authority and Issuance
For the reasons set out in the preamble, 31 CFR Part 212 is
proposed to be added to read as follows:
PART 212--TAXPAYER IDENTIFYING NUMBER REQUIREMENT
Sec.
212.1 Scope.
212.2 Definitions.
212.3 Agency and disbursing official responsibilities.
212.4 Effective date.
Authority: 5 U.S.C. 301; 31 U.S.C. 321, 3301, 3302, 3321, 3325,
and 3528.
Sec. 212.1 Scope.
This part governs the responsibility of certifying and disbursing
officials and heads of agencies in regard to the inclusion of taxpayer
identifying numbers (TINs) on certified vouchers. This part applies to
all payments certified by executive agencies pursuant to 31 U.S.C.
3325. This part also applies to all payments certified by the
Department of Defense.
Sec. 212.2 Definitions.
For purposes of this part:
Certified voucher or voucher means a payment voucher certified
pursuant to 31 U.S.C. 3528(a). A voucher may contain one or more
payment requests.
Certifying official means an officer or employee of an executive
agency having written authorization from the head of the agency to
certify vouchers.
Disbursing official or disbursing officer means an official who has
authority to disburse public money pursuant to 31 U.S.C. 3321 or
another law, including an official of the Department of the Treasury,
the Department of Defense, the United States Postal Service, or any
other government corporation, or any official of the United States
designated by the Secretary of the Treasury to disburse public money.
Executive agency means a department, agency, or instrumentality in
the executive branch of the United States Government.
Payment means a sum of money transferred to a person in
satisfaction of an obligation.
Payment certifying agency means any executive agency that has
transmitted a voucher to a disbursing official for disbursement.
Payment request means an individual request for a payment on a
certified voucher. A voucher may contain one or more payment requests.
Person means a natural person, corporation, trust, estate,
partnership, cooperative, association, agency, State or any other
entity that receives a Federal payment, other than another Federal
agency.
Reject means to suspend payment processing before funds are
disbursed to the payee, cancel the payment request, and credit any
funds that had been allocated for the payment to the payment certifying
agency.
Taxpayer identifying number (TIN) means the identifying number
described in section 6109 of the Internal Revenue Code of 1986 (26
U.S.C. 6109). Taxpayer identification number has the same meaning as
taxpayer identifying number.
Sec. 212.3 Agency and disbursing official responsibilities.
(a) As required by 31 U.S.C. 3325(d), the head of an executive
agency or the certifying official shall include with each certified
voucher submitted to a disbursing official pursuant to 31 U.S.C.
3325(a) the TIN of each person to whom payment may be made under the
voucher. When a voucher contains more than one payment request, a TIN
is required for each payment request. In the case of multiple payees
the TIN of each payee shall be included.
(b) A disbursing official will reject any payment request that does
not include the TIN required in paragraph (a) of this section.
(c) The disbursing official will notify the payment certifying
agency of any payment requests rejected under this section. For payment
to be made, the payment certifying agency will resubmit the payment
request with the TIN required in paragraph (a) of this section.
Sec. 212.4 Effective date.
This part applies to payments certified after [insert date 6 months
after date of publication of final rule].
Dated: August 26, 1997.
Michael T. Smokovich,
Acting Commissioner.
[FR Doc. 97-23179 Filed 8-29-97; 8:45 am]
BILLING CODE 4810-35-U
