FEDERAL TAX INTERCEPT
CS 670 Federal Tax Intercept - Criteria
05/87 Revised 08/25/16 Training Completed 08/17/10
Federal requirements found at 45 CFR 303.6(3) require the Office of Recovery Services/Child Support Services (ORS/CSS) to submit cases that meet the certification criteria for Federal tax refund offset (intercept) to the Federal Office of Child Support Enforcement (OCSE). Once a case is certified, ORSIS automatically modifies or changes the certification amount upwards or downwards if the non-custodial parent’s (NCP) debt balance increases or decreases. The actual intercept will occur when the NCP becomes eligible for a Federal tax refund from the Internal Revenue Service (IRS).
The NCP’s debts are certified for Federal tax intercept when the criteria listed below are met.
1. There must be an active primary or secondary obligor on an open case and the NCP’s Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN) is known.
2. There must be a current or previous address for the NCP.
3. There must be an administrative, judicial, or tribal court order for support, for which the support is delinquent.
a. IV-A and IV-E debts: The combined balance of IV-A and IV-E debts assigned to the State on all of the NCP’s cases are at least $150.00.
b. Non-IV-A and Non IV-E debts: The combined balance of Non-IV-A debts owing to the family and Non-IV-E debts assigned to the State on all of the NCP’s cases are at least $500.00.
c. A delinquent balance must be owing for at least 30 days. An NCP who meets the criteria to be certified for the first time, or an NCP who was deleted and now needs to be certified again, will not be certified until 35 days have passed from the date an Annual Notice of Past-due Child Support is sent to the NCP. Each time a delete occurs and the NCP later meets certification criteria, a new notice is generated and certification will occur 35 days from the date of the notice.
d. Accruing debts are considered when the debt balance is greater than the current support amount due.
e. Spousal support debts may be certified when CSS is also enforcing a child support order for the same NCP and custodial parent (CP). The spousal support debt is not certified after the last child covered by the child support order is 18 years old.
4. The federal tax intercept field must be coded “Y” (yes) for the debt to be considered. Code all arrears debts with a “Y” unless the court orders that the NCP’s Federal income tax return should not be intercepted.
5. The AUTO ENFORCE field must be set to “Y” (yes).
The following debts/cases are NOT certified for Federal tax refund intercept.
1. Incoming intergovernmental cases. The initiating agency will certify for Federal tax refund intercept if the criteria are met.
2. The AUTO ENFORCE field is not set to a “Y”.
a. Auto Enforcement Code is blank. The AUTO ENFORCE field remains blank until the case meets the qualifying criteria. Debts/cases will not certify for Federal tax refund intercept if the field is blank.
b. Bankruptcy filed or confirmed. The obligor is not certified for Federal tax refund intercept when the AUTO ENFORCE indicator is coded “B” (bankruptcy).
c. Good cause is pending or approved. The case is not certified for Federal tax refund intercept when the GOOD-CAUSE NON-COOP field is coded “GOOD CAUSE” and the STATUS field is coded. ORSIS changes the AUTO ENFORCE field to “G” (good cause).
3. All debts associated with other obligation types.
6. Non-IV-D (NIVD) cases.
Restrictive Support Order
Type an “N” (no) in the federal tax intercept field when the following criteria are met:
1. The court ordered an arrears payment schedule to liquidate the arrears; AND,
2. The NCP has paid the arrears payment as ordered each month since the order was entered; AND,
3. The order specifically says Federal tax refunds may NOT be intercepted.
An order entered by the responding state on an out-going intergovernmental case which contains an arrears payment is not considered a restrictive support order, unless the responding state’s order is the controlling order. The intergovernmental order is not considered an agreement between the NCP and CSS.
Consult with your manager to determine if it is appropriate to refer the case to the Attorney General’s Office to remove the restriction in the order to allow for Federal tax refund intercept.