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The Office of Legislative
and Public Affairs

Fact Sheets

U.S. Department of the Treasury
Delinquent Debt Collection
Fiscal Year 2012

Debt Management Service (DMS) continues to promote centralized services for sound financial management in the federal government. DMS collects delinquent debts through two major programs: the Treasury Offset Program (TOP) and Cross-Servicing.

Treasury Offset Program (TOP)
TOP compares the names of taxpayer identifying numbers (TINs) of delinquent debtors to the names of TINs of federal payment recipients. If there is a match, the federal payment is reduced or intercepted to satisfy the overdue debt. The simple premise of TOP is that Treasury should not be paying money to those who have failed to meet their obligations to the United States or state governments without first applying that money to the delinquent debt.

Under Cross-Servicing, federal agencies refer delinquent, non-tax debts to DMS for collection. DMS takes a number of actions to collect, such as contacting debtors by letter and phone; negotiating repayment agreements; referring debts to private collection agencies (PCAs) for additional collection action and to the Department of Justice for litigation; issuing administrative wage garnishment orders to attach the wages of working debtors; and, reporting debts to credit bureaus.

Since 1996, DMS has collected more than $62 billion in delinquent debt. In fiscal year 2012, collections of delinquent debts owed to federal and state agencies totaled $6.2 billion. This accomplishment demonstrates DMS' mission-driven focus collecting delinquent debts owed to government agencies that otherwise would not be collected - money that now becomes available to help fund important programs and services.

In fiscal year 2012, FMS collected:

  • $2.4 billion of delinquent federal non-tax debt owed to federal agencies;
  • $601.6 million of delinquent federal tax debt owed to the Internal Revenue Service;
  • $2.25 billion of delinquent child support owed to states and custodial parents; and
  • $748.4 million of other types of delinquent debts owed to the states

DMS emphasizes operational excellence, and continually looks for ways to effectively and efficiently increase collections. In fiscal year 2012, DMS collected $49 for every $1 dollar spent.

The following are highlights:

Administrative Wage Garnishment (AWG)
For debtors who work outside the federal government, DMS uses AWG as an essential collection mechanism in its Cross-Servicing program to attach the pay of individuals who owe delinquent, non-tax debts to participating federal agencies. AWG collections continue to increase, with a 17.4 percent increase in AWG collections in fiscal year 2012 over fiscal year 2011. In fiscal year 2012, AWG exceeded the $100 million mark in cumulative collections.

State Reciprocal Program
DMS continues to optimize delinquent debt collections through its State Reciprocal Program (SRP). In fiscal year 2012 both Minnesota and Wisconsin joined the states of New York, New Jersey, Maryland and Kentucky in the SRP, bringing the total number of state participants to six.

Child Support Enforcement
Since 1999, more than $28.2 billion in delinquent child support debt has been collected through TOP. In fiscal year 2012, $2.25 billion was collected – money that helps support America’s children and families.

Unemployment Insurance Compensation (UIC)
In fiscal year 2012, TOP expanded participation in the UIC program from 3 states to 19 states and the District of Columbia. In fiscal year 2012, more than $132.9 million was collected through TOP for delinquent unemployment insurance compensation debts owed to states.

Do Not Pay Program (DNP)
Effective fiscal year 2013, the Do Not Pay program, which is responsible for helping agencies identify and prevent improper payments, was aligned organizationally under DMS. The purpose of DNP is to reduce improper payments by intensifying efforts to eliminate payment error, waste, fraud, and abuse in the major programs administered by the federal government, while continuing to ensure that federal programs serve and provide access to their intended beneficiaries.

Centralized Receivables Service (CRS)
In fiscal year 2012, DMS initiated a pilot program for providing centralized accounts receivables servicing to federal agencies. With CRS, we will be able to provide agencies with efficient management of receivables from invoicing through resolution.

   Last Updated:  March 14, 2014