About Debt Collection Improvement Act Tips

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What is the Debt Collection Improvement Act of 1996?

What is the DCIA?

About Debt Collection Improvement Act: FMS Debt Collection and The Debt Collection Improvement Act of 1996
In response to a steady increase in the amount of delinquent non-tax debt owed to the United States, and concern that appropriate actions were not being taken to collect this delinquent debt, Congress passed the Debt Collection Improvement Act of 1996 (DCIA). This law centralized the government wide collection of delinquent debt and gave Treasury significant new responsibilities in this area. The Financial Management Service (FMS) is responsible for Treasury's implementation of the debt collection provisions of the DCIA.
TOP has been expanded to incorporate other offset processes, particularly: (1) the tax refund offset program, formerly operated by the Internal Revenue Service, was merged into TOP in January 1999; (2) levies served by the IRS for the collection of delinquent tax debt in accordance with the Taxpayer Relief Act of 1997; and (3) collection of state income tax debts by offset of federal income tax refunds as mandated by the 1998 Internal Revenue Service Restructuring and Reform Act. Different statutory requirements have made implementation of the entire TOP program very complex.
The other primary debt collection tool operated by FMS is "cross-servicing" which uses a variety of collection tools to encourage debtors to repay the federal government. Federal agencies are required to refer eligible delinquent (over 180 days) non-tax debts to Treasury for debt collection action, if they have not been successful at collecting those debts. The types of debts referred to FMS include unpaid loans, overpayments or duplicate payments made to federal salary or benefit payment recipients, misused grant funds, and fines, penalties or fees assessed by federal agencies. FMS sends demand letters to debtors on Treasury letterhead, and enters into repayment arrangements with debtors. FMS' cross-servicing program administers a contract with PCAs who provide delinquent debt collection services and FMS refers debts to these PCAs.

What is the Debt Collection Improvement Act (DCIA)?

National Debt Collection Laws

According to the official FCC government website (www.fcc.gov), in 2004, the FCC adopted debt collection laws implementing the requirements of the Debt Collection Improvement Act of 1996 (DCIA). Congress enacted the DCIA to strengthen Federal debt collection procedures. The FCC's new DCIA implementing rules went into effect on June 16, 2004, except for changes relating to the handling of applications and other requests by delinquent debtors, which take effect on October 1, 2004.

The Debt Collection Improvement Act require that entities or individuals doing business with the FCC pay their debts in a timely manner. The rules also explain how entities or individuals are notified of debts owed to the FCC, and how the FCC will collect those debts. The rules provide that if you fail to pay debts owed to the FCC, the debts will be referred to the Department of Treasury for collection. Your failure to pay will be reported to credit reporting agencies, and you will be unable to obtain any licenses or other benefits from the FCC.

The “Red Light Rule”
The inability of delinquent debtors to obtain FCC benefits is also known as the “red light rule.” The red light rule requires the Commission to withhold action on applications and other requests for benefits when the entity applying for or seeking benefits is delinquent in non-tax debts owed to the Commission, and to dismiss such applications or other request if the delinquency is not resolved. In determining whether an entity is delinquent for purposes of the red light rule, the Commission matches the FCC Registration Number (or FRN) of the applying entity to its database of debts; the applicant's FRN will be linked to all other FRN's associated with the same Taxpayer Identification Number (TIN). To obtain an FRN, go to our CORES registration site https://svartifoss2.fcc.gov/cores/CoresHome.html

Checking the Status of Your FCC Account
The Red Light Display System (RLD). The FCC has created a new Red Light Display System (RLD) to enable entities doing business with the FCC to determine if they have any outstanding delinquent debt. The RLD enables you to check the status of your account by individual FRNs, and links other FRNs sharing the same TIN when determining whether there are outstanding delinquent debts. The RLD is now operational at http://www.fcc.gov/redlight/.

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