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FGMSD-80-68 1 (1980-07-17)

handle is hein.gao/gaobabauq0001 and id is 1 raw text is:      RELEASED RESTRICTED -Not to be released outside the General
                ccount.rg Cfeco c  on the bas!s of opecific   112
                by the Cffice of Coingrcssonal Relations.
                COMPTROLLER GENERAL OF THE UNITED STATES
                        WASHINGTON, D.C. 20146


B-199382                                          JULY 17, 1980



The Honorable Jim Sasser                          i
Chairman, Subcommittee on the
  Legislative Branch
Committee on Appropriations                          112878
United States Senate

Dear Mr. Chairman:

     Subject: [Qregon's Offset Program for Collecting
               Delinquent Debts Has Been Highly
               Effectiv§1(FGMSD-80-68)

     Your letter of October 24, 1979, asked us to evaluate
Oregon's program for collecting uncontested delinquent debts
by keeping State tax refunds as offsets. You were interested
in knowing the success of this program and. its applicability
to the Federal Government.

     Oregon's offset program has been very successful in col-
lecting delinquent debts. In 1979 alone, over $2.4 million
in delinquent debts that most likely would have been lost to
the State were collected by offset. The State spent only
about $200,000 to collect this amount.

     Oregon has collected significant amounts of money that
would otherwise be uncollected while at the same time pro-
tecting the rights of the debtors. Only acknowledged debts
of an undisputed amount are subject to offset. Strict con-
trols have been implemented to ensure that (1) the debtor has
every opportunity to establish that the debt is invalid and
(2) tax refunds are not arbitrarily offset.

     The Oregon program is similar to a Federal offset program
we recommended in our March 9, 1979, report The Government
Can Collect Many Delinquent Debts By Keeping Federal Tax Re-
funds As Offsets (FGMSD-79-19). In that report we proposed
that, on a test basis, agencies refer to the Internal Revenue
Service for offset those debts which the agencies have been
unable to collect through normal collection procedures. The
test program would include provisions to ensure that only
undisputed debts were offset and to fully protect the debtor's
right to due process. The Internal Revenue Service was unable


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