6509.11h_22_25
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FSH 6509.11H - SERVICE-WIDE CLAIMS MANAGEMENT HANDBOOK
CHAPTER 20 - ADMINISTRATIVE CLAIMS FOR THE GOVERNMENT
Supplement No.: 6509.11h-94-2
Effective Date: December 5, 1994
Duration: This supplement is effective until superseded or removed.
Approved: CHARLES W. CARTWRIGHT, JR.
Regional Forester
Date Approved: 12/05/1994
Posting Instructions: Supplements are numbered consecutively by Handbook number and calendar year. Post by document; remove the entire document and replace with this supplement.
Retain this transmittal as the first page(s) of this document. The last supplement to this
Handbook was 6509.11h-94-1 to chapter 20.
New Document(s):
Superseded Document(s) by
Issuance Number and
6509.11h_22_25 4 Pages
Effective Date
Digest:
25.27 - Adds direction and procedures for referral of delinquent debts to the Internal Revenue
Service for income tax refund offsets.
Standardizes Regional document name of directive to match Washington Office document name.

R3 SUPPLEMENT 6509.11H-94-2
EFFECTIVE DATE: 12/05/1994
DURATION: This supplement is effective until superseded or removed
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FSH 6509.11H – SERVICE-WIDE CLAIMS MANAGEMENT HANDBOOK
CHAPTER 20 – ADMINISTRATIVE CLAIMS FOR THE GOVERNMENT
25 - DEBT MANAGEMENT.
25.2 - Debt Collection Tools.
25.27 - Reporting Delinquent Debts to the Internal Revenue Service for Tax
Refund Offset.
Refer debt collections through the Regional Office. Regional Office Fiscal and Accounting
Services staff work with the National Finance Center (NFC) and the Internal Revenue Service
(IRS) for offset against debtors' tax refunds. NFC, through a memorandum of understanding, works with the IRS to attempt to offset tax refunds and to match debtors against employee files in the Federal Salary Offset Program.
1. Referring Debts to the Internal Revenue Service. a. Referral may occur only after aggressive collection action has been taken. b. c.
Referral must occur within 10 years of debt origin.
Only debts greater than $25 may be referred to IRS for tax refund offset. d. e.
The debt must not have previously been declared uncollectible.
A valid social security number for the debtor must be provided to NFC. f. Only undisputed debts may be referred for tax refund offsets.
2. Debts Eligible for Referral for Tax Refund Offset. At this time, only the following debts may be referred for tax refund offset. a. Former Forest Service Employee Debts. Debts owed by individuals who are no longer employed by the Forest Service and the debt was not offset from the final salary payment. These debts may include co-op student appointments, training agreements, embezzlements, accountable officer liability, rent for
Government housing, and similar debts of this type. b. Damage to Government Vehicles. Debts involving motor vehicle accidents where a private citizen is liable to the Government for damages. c. Debts Owed Under a Defaulted Contract. Refer only those debts owed by a general partnership or sole-proprietor. These debts may not be referred until the
Contract Disputes Act appeal period has expired.
3. Procedure for Reporting Debts for Tax Refund Offset. Debts may be transmitted to
NFC for tax refund offset only by the Regional Claims Officer. A referral package must be

R3 SUPPLEMENT 6509.11H-94-2
EFFECTIVE DATE: 12/05/1994
DURATION: This supplement is effective until superseded or removed
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FSH 6509.11H – SERVICE-WIDE CLAIMS MANAGEMENT HANDBOOK
CHAPTER 20 – ADMINISTRATIVE CLAIMS FOR THE GOVERNMENT assembled for each debt to be transmitted for tax refund offset. The referral package must contain the following: a. A formal transmittal letter providing a synopsis of how the debt was incurred, subsequent Agency action, debtor's social security number, management code, budget object, whether or not the debt was referred to a collection agency and/or credit bureau, and any peculiarities involved, for example: joint and several liability, and spousal liability under state law. b. Copy of initial demand letter. c. Copy of a revised Form FS-6500-89, Bill for Collection, showing current interest, administrative costs, and penalty charges. The bill should be projected at least 2 weeks in advance. Enclose a worksheet showing:
(1) Date of original Form FS-6500-89, Bill for Collection and date payment was due.
(2) Principal amount owed.
(3) Interest rate, date interest accrues, and date through which interest has been calculated.
(4) Accrued administrative costs.
(5) Penalty charge, date penalty accrues, and date through which the penalty charge has been calculated.
(6) Court costs, if applicable. d. Copy of judgment, if applicable. If a judgment has been obtained against the debtor, the 10-year statute of limitations does not apply to this debt.
Once the debt is referred for tax refund offset, no further collection action may be effected by the
Forest Service without notifying NFC. NFC reports the debt to credit bureaus and contacts the
Regional Office for any further information or needed action, and notifies the Regional Office of termination of collection action if no match is made or money received after several years. NFC will issue Department of Treasury Form 1099, Certain Government Payments, on any of these debts written off as uncollectible.
25.29 - Holdup List of Defaulted Contractors.
The Regional Claims Officer publishes a "holdup list" containing all debts arising from contractual activities in the Region. The list is sent to all procurement offices. This list, marked
"For Official Use Only," is revised and distributed quarterly . Due to the confidential nature of this list, access must be limited to those requiring information for official purposes. Under no circumstances may this information be released externally, unless under due process of law.

R3 SUPPLEMENT 6509.11H-94-2
EFFECTIVE DATE: 12/05/1994
DURATION: This supplement is effective until superseded or removed
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FSH 6509.11H – SERVICE-WIDE CLAIMS MANAGEMENT HANDBOOK
CHAPTER 20 – ADMINISTRATIVE CLAIMS FOR THE GOVERNMENT
Each Forest must notify the Regional Claims Officer when a name is to be added to or deleted from the holdup list.
25.3 - Use of State Small Claims Court.
State Small Claims Courts are not used in Region 3.