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The Office of Legislative
and Public Affairs

Fact Sheets

U.S. Department of the Treasury
Delinquent Debt Collection
Fiscal Year 2011

Debt Management Service (DMS) continues to be a central tool 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 and taxpayer identifying numbers (TIN's) of debtors to the names and TIN's 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 without first applying that money to the delinquent obligation.

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 (PCA's) 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 $54 billion in delinquent debt. In fiscal year 2011, collections of federal delinquent debt totaled $6.17 billion, surpassing fiscal year 2010 by $721.7 million. This increase has a tangible impact and demonstrates DMS' mission-driven focus collecting delinquent debts owed to the federal government that otherwise would not be collected, money that now becomes available to help fund important federal programs and services.

In fiscal year 2011, FMS collected:

  • $2.57 billion of delinquent federal non-tax debt owed to federal agencies;
  • $614 million of delinquent federal tax debt owed to the Internal Revenue Service;
  • $2.31 billion of delinquent child support owed to states and custodial parents; and
  • $537 million of other types of delinquent debts owed to states.

DMS emphasizes operational excellence, and continually looks for ways to effectively and efficiently increase collections. In fiscal year 2011, DMS collected $55.31 for every $1 dollar spent. DMS also emphasizes optimizing the delinquent debts it manages and extending its services to assist federal and state programs. 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 61 percent increase in AWG collections in fiscal year 2011 over fiscal year 2010.

State Reciprocal Program
DMS continues to optimize delinquent debt collections through its State Reciprocal Program. Today, four states participate in our State Reciprocal Program (New York, New Jersey, Maryland, and Kentucky). Additionally, a number of states are working on legislation that will enable them to participate in the near future. Kentucky is the most recent state to join the program (January 2011), and in its first month received $4.7 million from the offset of payments to federal contractors. New York has received more than $4.5 million since joining the program in January 2010.

Child Support Enforcement
Since 1999, more than $24.8 billion in delinquent child support debt has been collected through TOP. In fiscal year 2011, $2.31 billion was collected.Śmoney that helps support America's children and families.

Unemployment Compensation
Under a brand new program this fiscal year, more than $25.9 million has been collected through TOP for Unemployment Compensation.

   Last Updated:  March 14, 2014