Offset of Federal Tax Returns

GAO discussed the magnitude of debts owed to the Government, steps that have been taken to improve Federal debt collection, and offset of delinquent debts against tax refunds due to debtors. GAO found that, at the end of fiscal 1982, there were approximately $14 billion in delinquent nontax debts owed to the Government. In 1981, the President directed executive branch agencies and departments to implement an aggressive debt collection program. In 1982, the Debt Collection Act of 1982 became law, authorizing even more aggressive debt collection policies and removing some obstacles to collection. In addition to these steps, GAO suggests offset of delinquent debts against tax refunds. GAO believes that, if the debtor's right to due process is respected, such offsets could be a valuable tool in strengthening collection of debts owed to the Government. GAO also believes that effective arrangements could be worked out to implement such offsets using interagency agreements between the Internal Revenue Service (IRS) and Federal agencies wishing to refer debts for offset. However, GAO does not believe that IRS should become a debt collection clearinghouse, because debt collection is the primary responsibility of each Federal agency.