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U.S. Treasury Collects More Than $3 Billion in Delinquent Debts for States Including $1.8 Billion in Delinquent Child Support

April 19, 2018

The U.S. Department of the Treasury’s (Treasury) Bureau of the Fiscal Service (Fiscal Service) today released its Fiscal Year (FY) 2017 Annual Report to the States on the Treasury Offset Program’s (TOP) Delinquent Debt Collection. The report details each state’s success in collecting delinquent debts through a unique partnership with the federal government. Debts successfully recovered through TOP include delinquent child support and state income tax obligations, unemployment insurance compensation fraud and employer tax debts, and more.

“The Fiscal Service is proud of the work we have done in collecting more than $3 billion in delinquent debts for the states in FY 2017, including $1.8 billion of delinquent child support," said Fiscal Service Commissioner Sheryl Morrow. “The simple premise of the offset program is that as Treasury we should not pay those individuals or businesses that have failed to meet their government obligations without first applying that money to the delinquent obligation.”

“Treasury encourages states to participate in each of our offset programs,” Commissioner Morrow said. “With our proven track record of helping to collect long overdue funds, states can benefit directly from our efforts and recover important taxpayer funds that are owed to them.”

TOP is used to intercept eligible federal and state payments to delinquent debtors, in accordance with the Debt Collection Improvement Act of 1996 and other legal authorities. Federal law requires state agencies to certify that the debt is valid, delinquent, and legally enforceable and that the agency has complied with all due process pre-requisites prior to offset. This means that, at least 60 days prior to submission of the debt to TOP, the creditor agency has sent a notice to the debtor stating the amount and type of debt and the agency’s intention to refer the debt to TOP for offset. The creditor agency must also provide the debtor with the opportunity to resolve the debt through a repayment agreement and/or to dispute the agency"s claim.

Due to Fiscal Service’s strong federal-state partnerships in FY 2017, TOP recovered $7.26 billion for federal and state agencies, including $1.8 billion in delinquent child support debts, $607.7 million in outstanding state income tax obligations, $353.8 million in unemployment insurance claims, and $85.3 million in other state debts. Treasury is proud to partner with the following federal agencies in administering TOP state programs: the U.S. Department of Agriculture, Food and Nutrition Services for the Supplemental Nutrition Assistance Program; the U.S. Department of Health and Human Services for Child Support; and the U.S. Department of Labor and Internal Revenue Service for Unemployment Insurance. Since the implementation of TOP in 1996, the Fiscal Service has collected $90.0 billion for federal and state agencies, including $45.9 billion for participating states.

To view the FY 2017 Annual Report to the States on TOP’s Delinquent Debt Collection, or for more information about TOP state programs, visit fiscal.treasury.gov/top/resources-for-state-agencies.html.

Last modified 05/03/18