Taxpayer Identification Number (TIN) Policy

Background

The Debt Collection Improvement Act of 1996 (DCIA) requires federal disbursing officials to offset an eligible payment to a payee to satisfy a delinquent non-tax debt owed by the payee to the government, a process known as offset.

Under regulations implementing this statute, a federal disbursing official should conduct an offset when the name and Taxpayer Identification Number (TIN) of a payee match the name and TIN of a delinquent debtor.

The DCIA also requires agencies to include the TIN of each payee on certified payment vouchers submitted to a disbursing official. Providing TINs on payment vouchers is necessary to carry out offset and vendor income reporting.

The Taxpayer Relief Act of 1997, enacted subsequent to the DCIA, included a provision that provides for the continuous levy of federal non-tax payments to collect delinquent tax debts.

Continuous levy will be implemented by the the Bureau of the Fiscal Service (Fiscal Service) through a process similar to that of offset, and, accordingly, TINs on payment certifications are also required to implement this program.

Under 31 U.S.C. 3325(a), Fiscal Service is responsible for determining that payment vouchers certified to Treasury are in correct form.

To ensure that agencies submit payment vouchers in a proper form which includes TINs, the former FMS (now Bureau of the Fiscal Service) issued a Policy Statement in the Federal Register on October 9, 1998, requiring agencies to prepare and submit implementation reports to FMS (now Fiscal Service) documenting compliance with the TIN requirement and identifying barriers to providing TINs.

Fiscal Service required these reports to determine compliance, evaluate the effectiveness of proposed agency compliance strategies, identify barriers to TIN collection, determine if any circumstances prohibited use of TINs on payment vouchers, and formulate guidance to assist agencies in overcoming barriers impeding the collection and provision of TINs.

Agencies were asked to document the current status of their compliance with the TIN requirement, identify barriers to collecting and providing TINs, and provide strategies for achieving agency compliance through the elimination of such barriers.

Fiscal Service used these reports and input from agencies at interagency policy workgroup meetings as a basis for providing exceptions to the TIN requirement if specific legitimate barriers exist.

Exceptions

To ensure that agencies submit payment vouchers in a proper form, Fiscal Service is requiring that federal payment vouchers submitted to Treasury include a valid TIN.

Fiscal Service will not require a TIN on payment vouchers under the following circumstances:

1. Where an agency does not have the statutory or legal authority to require a federal payee to submit a Taxpayer Identification Number and the agency has no other means of obtaining it;
   
   Several agencies noted that certain court-ordered payments must be made, regardless of whether the paying agency had received a TIN.
   
   There may be other circumstances when agencies lack the legal or statutory authority to require TINs from certain payment recipients.
2. Where a federal payment recipient is unable to obtain a Taxpayer Identification Number;
   
   Agencies commented that certain payment recipients are incapable of obtaining TINs. For example, agencies noted that foreign companies, foreign visitors, and U.S. Government agencies are unable to obtain a TIN and would therefore be unable to supply a TIN on a payment request.
3. Where the collection or provision of a Taxpayer Identification Number has a detrimental effect on a law enforcement operation, military operation, national security, or emergency relief effort; or
   
   Law enforcement agencies indicated the need, in certain circumstances, to protect the identity of certain individuals, such as the case for payments to the witness protection program, for undercover operations, or to informants.
   
   Law enforcement agencies may also have the need to pay an indigent fact witness to facilitate law enforcement. Fiscal recognizes that payments for military operations, natural disasters, and emergencies must be made as soon as possible and therefore do not require the collection of TINs by an agency when the collection of such information could delay the payment process and endanger life or property.
4. Where the agency does not expect to make more than one payment, in an amount of $200 or less, to the same recipient within a one-year period (i.e., the payment is non-recurring) and the cost of obtaining a TIN would be prohibitive.
   
   Several agencies noted that collecting TINs from individuals for one-time, small-dollar payments, such as refunds for overpayments, is economically prohibitive.
   
   Fiscal Service recognizes that it is not practical to collect TINs when an agency is making non-recurring, small-dollar payments and has established a de minimus amount of $200, under which amount an exception would exist.
5. Where Fiscal Service determines that the collection or provision of a TIN is not in the best interest of the Government.