TN 132 (05-25)

SI 02220.012 Collection of title XVI overpayments by Tax Refund Offset (TRO)

A. Policy

1. Authority for the Treasury Offset Program (TOP)

The Debt Collection Improvement Act of 1996 (DCIA, P.L. 104-134) provided for the establishment of TOP. For a detailed description of the TOP process, see GN 02201.029.

2. Authority for Tax Refund Offset (TRO)

Section 3720A of 31 USC permits the Social Security Administration (SSA) to recover delinquent title XVI overpayments from former recipients by offsetting their federal income tax refunds. The Foster Care Independence Act of 1999 (FCIA) authorizes the collection of delinquent title XVI debts by administrative offset. For the new title XVI policy on administrative offset, see SI 02220.013.

3. Criteria for TRO selection

Selection of debts for recovery by TRO is made by the system each week from the Supplemental Security Record (SSR) and Numident records. All of the following criteria must apply:

  • The debtor is alive;

  • The debtor is not eligible for Supplemental Security Income (SSI) benefits;

  • The debtor was at least 18 years old when the debt was established on SSA's records;

  • The debt is $25 or more;

  • The debtor is not making regular installment payments, or efforts to recover the debt have terminated;

  • The debt is past-due, and

  • The debt is legally enforceable.

NOTE: 

Treasury conducts the TRO program through its automated system, TOP. TRO runs on a weekly selection and certification cycle. For more information about TOP, see GN 02201.029.

NOTE: 

Effective May 12, 2017, SSA no longer refers title II, title VIII, or title XVI debts that have a delinquency date of May 19, 2002 or earlier. There is no manual action necessary to prevent TOP selection because the selection is automated. Rather, our automated ECO system no longer selects these debts for external collection. Debts with a delinquency date after May 19, 2002 remain eligible for TOP referral.

NOTE: 

Due to economic challenges during the COVID-19 pandemic, SSA suspended TOP debt collection activities in March 2020. TOP activities resumed in March 2025. Debtors referred to TOP prior to March 2020 received pre-offset notification before TOP activities resumed.

4. Pre-Offset notice

Once a debt is selected for TRO, SSA must send the debtor a pre-offset notice. ECO retrieves a verified address for the debtor from an Address Verification Contractor (AVC).

a. Notice issuance

  • If the AVC provides a good address, then the pre-offset notice is mailed to that address.

  • If the AVC does not return a good address and the MBR or Supplemental Security Record (SSR) was updated within the last year, the notice is mailed to the address on the MBR or SSR.

  • If there is not good address from the AVC and the MBR or SSR address was updated more than a year ago, the AVC will be checked again in six months. The pre-offset notice will be mailed once a good address is obtained.

For information on handling undeliverable pre-offset notices, refer to SI 02220.012F in this section.

Refer to GN 02201.029C for more information on the selection, notification, and referral process.

NOTE: 

The automated address request operation is a separate project from the address request made by the Debt Management Sections (DMS). The automated operation has no impact on the DMS requests.

b. Notice information

The notice informs the debtor of the planned offset action and:

  • They owe a delinquent debt for a specified amount;

  • SSA plans to

    • refer the debt to Treasury for TRO,

    • if applicable,

      • administrative offset,

      • conduct administrative wage garnishment, and

    • send information about the debt to credit bureaus after 60 days have expired from the date on the notice;

  • SSA will not take this action if, before the end of that 60-day period, the debtor:

    • pays the debt in full,

    • makes regular installment payments under an agreement with SSA,

    • requests waiver, or

    • furnishes evidence showing

      • they do not owe all or part of the stated amount, or

      • SSA does not have the right to collect debt.

  • The debtor may review and copy SSA's records about the debt.

NOTE: 

ECO notices sent November 2015 or later are stored in the Online Notice Retrieval System (ORS). For ECO notices sent prior to November 2015, view the ECO master query. For additional information on the ECO master query, see MS 01114.007.

B. Past-due debt

1. Definition of past-due debt

For SSA TRO purposes, a past-due debt is one on which:

  • Payment is delinquent; and

  • No appeal or waiver request is pending.

2. When a debt is delinquent

A debt is delinquent on the later of the following dates:

  • The 60th day after the initial overpayment notice date; or

  • The date on which a decision on a protest (i.e. appeal or waiver request) is made.

C. Legally enforceable debt

A legally enforceable debt for SSA TRO purposes is a debt that still is subject to recovery from the debtor because:

  • The debt has not been paid in full;

  • Recovery has not been waived;

  • A bankruptcy petition is not currently pending in court;

  • The debt was not previously discharged in bankruptcy;

  • The debtor is alive; and

  • The debtor is responsible for the debt.

D. Handling debtor inquiries or protests - pre-offset

In most cases, the debtor has previously been given ample opportunity to dispute the overpayment and repay the debt. However, there are situations where the selection for TRO may be erroneous because SSA's records contain outdated or incorrect information.

Although the time period to request reconsideration of the overpayment determination has passed, under the TRO process, the debtor has the right to object to the collection of a debt on the basis that all or part of the debt is not past-due or not legally enforceable (see SI 02220.012B, SI 02220.012C, and SI 02220.012E.6 in this section). This section explains how to handle specific inquiries, protests and allegations prior to certification and offset.

1. Request for explanation of overpayment

If a request for an explanation of the overpayment is received, use the SSID to provide an explanation of the overpayment. Keep explanations generic to the extent possible. For example: "You were no longer disabled as of 05/24 and continued to receive checks through 12/2."

a. PC and TSC action

If online queries contain insufficient information or unresolvable discrepancies, proceed as follows:

  • On the MSSICS Update Sequence Data (UOSD) screen (see MS 00304.006):

    • Select EXPLANATION OF OVERPAYMENT to suspend billing.

  • Refer a priority Modernized Development Worksheet (MDW) to the jurisdictional FO

    • Request the FO provide an explanation to the debtor.

  • Annotate the referral Necessary Action - TOP/Credit Bureau Case - Do Not Backlog.

b. FO action

If the FO received an explanation request from the PC or TSC via an MDW:

  • Provide a satisfactory explanation to the debtor,

  • Remove the suspend billing code via the MSSICS Update Sequence Data (UOSD) screen, see MS 00304.006.

2. Request for explanation of TRO

a. General response

If a request for an explanation of TRO is received, explain the following:

  • Congress passed a law which allows Treasury to withhold delinquent overpayments from federal payments, including income tax refunds, due the overpaid person.

  • The pre-offset notice also contains an explanation of TRO.

No systems input is needed to document the request for explanation of TRO or other external collections (ECO) tools

b. Specific debt response

If the debtor ask for an explanation of a delinquent or legally enforceable debt, see SI 02220.012B and SI 02220.012C in this section.

3. Request for waiver

If a request for waiver is received,

  • Obtain an SSA-632-BK in accordance with current instructions in GN 02250.001 and GN 02250.002.

  • Advise the debtor that TRO remains in effect until SSA received a completed and signed SSA-632-BK (or its equivalent).

When the signed form (or other request) is received

  • Input the waiver request via the Direct SSR Update Waiver (UOWV) screen (see MS 00304.009and SM 01311.423).

Do not delay recording the request once written documentation is received. Process in accordance with GN 02250.002.

4. Request to inspect SSA's record

In all situations, the FO will attempt to satisfy the review request without the need to obtain the paper claims folder. However, if the debtor wishes to review the folder you must obtain it (for SSI folder recall, see SM 01201.205).

If the debtor ask to review records:

  • In person at the FO - obtain all systems queries and explain what the queries show.

  • By telephone to the FO - set up an appointment for a review of the queries. Schedule the appointment well in advance of the 60-day time limit; emphasize the debtor must submit evidence.

  • To a PC or TSC - advise the FO, via a priority MDW, to contact the debtor to set up an appointment. Annotate the MDW accordingly, "Urgent-TOP/Credit Bureau Case."

If the FO has not conducted a folder review before due process has expired, add EXPLANATION OF OVERPAYMENT on the Update Sequence Data (UOSD) screen in Direct SSR Update until the necessary review of the record is complete, see MS 00304.006.

NOTE: 

Certification occurs no less than 60 days after the date of the pre-offset notice.

5. Request for installment payments

If the debtor wants to repay the debt by monthly installments, to negotiate a reasonable monthly payment amount follow SI 02220.025B.2.

Advise the debtor the debt of the following:

  • The debt will remain eligible for TRO until the first payment is received;

  • The debt will not be referred to TRO as long as payments are made according the agreement.

  • Send the installment payment to:

    • pay online using the information provided in the pre-offset notice, or

    • the address shown on the Payment Stub form attached to the pre-offset notice, or

    • as a last resort, the remittance address (MATPSC, P. O. Box 3430, Philadelphia, PA 19122-9985) if the debtor does not have the form.

  • Record the name and claim number on the remittance payment to ensure proper posting for the beneficiary.

  • Upon default of one or more installment payments, the debt will be referred to Treasury for collection, where it will remain until the debt is satisfied.

The debtor may subsequently offer to resume regular installment payments. The payments will be accepted and applied towards the debt, but TRO will not be deactivated until the debt is paid in full.

For instructions on adding the installment agreement G TAC, on the SSR, see SI 02220.025B.2,SM 01311.235, and MS 00304.008).

6. Debtor objects to collection of debt

A debtor may object to collection of the debt for two reasons:

  • They object to SSA's determination the debt is past due and legally enforceable.

  • They protest the fact or amount of debt.

If a debtor objects to collection of the debt, follow these procedures:

a. Debtor objects to SSA's determination the debt is past due and legally enforceable

  1. 1. 

    General policy

    Under the law authorizing TRO, a debtor has the right to object to the collection of a debt on the basis that all or part of the debt is not past due or not legally enforceable, see SI 02220.012B and SI 02220.012C. These types of protests require submission of evidence to rebut SSA's findings. However, there are some situations in which an effective protest to collection is based on only the debtor's current statement and information in the claims folder.

  2. 2. 

    Debtor objects and an external collection review is requested

    If the debtor objects the collection, advise the debtor SSA must receive any evidence supporting the objection within 60 days from the date of the pre-offset notice.

    Examples of evidence that could rebut SSA's determination that a debt is past due and legally enforceable include:

    • Copies of checks (front and back), money orders, and receipts showing payments that reduced or eliminated the debt;

    • A waiver approval notice;

    • A waiver or reconsideration request (but no SSA determination regarding that request);

    • A report that the debtor is deceased; or

    • Bankruptcy documents showing the debt was discharged or a bankruptcy petition is pending.

      NOTE: This list is not all-inclusive. SSA must evaluate any evidence submitted by the debtor on a case-by-case basis.

  3. 3. 

    Debtor submits evidence

    If an objection to collection is made:

    • Accept any evidence the debtor submits.

    • Input appropriate suspend billing code on the UOSD screen, if necessary (see MS 00304.006).

    • Obtain:

      • a statement from the debtor that explains their reason(s) for objection to collection of the debt (e.g., Statement of other person, Form SSA-795). Do not obtain an SSA-561-US.

      • the claims folder, if available (see SI 02220.012D.4 in this section).

      • additional information if needed from the debtor prior to making a decision.

    • Review the evidence to determine if the debt is still past-due and legally enforceable as defined in SI 02220.012Band SI 02220.012C.

      • If yes, and the case can be adjudicated without additional information, send a notice to the debtor explaining why the debt is collectible (in whole or in part).

    • Notify the debtor of the final decision

    • Delete the suspend billing code by completing the MSSICS Update Sequence Data (UOSD) screen (see MS 00304.006).

If evidence to support the objection to collection of the debt is received after 60 days from the date of the pre-offset notice:

  • SSA will accept and review the evidence.

  • The debt remains in the TRO program unless evaluation of the evidence proves the debt is not past-due and legally enforceable.

IMPORTANT: Since a review to determine if a debt is past due and legally enforceable is not an initial determination, do not include any appeal language in the decision notice.

b. Debtor protests the fact or amount of debt

If a debtor protests the fact or amount of a debt, obtain an SSID query (see SM 01601.000).

  • If there is no indication that a request for review is pending, explain the time period to appeal the overpayment determination has expired and; therefore, the determination is final.

  • If good cause for extending the time limit is established, process the request as timely filed (see SI 04020.020).

  • If the debtor indicates they have evidence that refutes SSA's records, explain the debt will be referred to Treasury unless we receive the evidence within 60 days from the date of the pre-offset notice.

When the evidence is received follow SI 02220.012E.6.a ,in this section.

7. Debtor alleges non-receipt of overpayment or direct deposit payment

If a debtor alleges non-receipt of the overpayment check(s) or direct deposit payment(s), obtain an SSID query or Q query.

If the query shows no record of non-receipt of the payment(s) in question, proceed as follows:

  • If the debtor had a representative payee, explain that we sent the payment(s) to the payee and there is no indication the payee did not receive the payment(s).

  • If there was no representative payee, explain that our records did not show any evidence of a non-receipt allegation at the time the initial overpayment notice was sent.

  • If the debtor insists that we provide a photocopy of the check(s) in question,

    • Explain that we will investigate but our system will refer the debt to Treasury for offset.

    • We will repay any erroneous offset if our investigation supports the non-receipt allegation.

    To process the non-receipt allegation for a check follow GN 02406.130 and for a direct deposit payment GN 02406.007. DO NOT MAKE a suspend billing code input.

    If the date of the alleged missing check is more than 12 months in the past, see GN 02401.901 through GN 02401.920 for processing limited payability non-receipt cases.

NOTE: 

If the investigation shows a copy of the check is not available, presume the debtor received the check. We will determine the overpayment occurred and the debt remains subject to collection.

8. Debtor makes a compromise offer

If the debtor makes a compromise offer, process in accordance with existing instructions in SI 02220.030 and sensitive instructions SI 02220.031.

If SSA agrees to the offer, stress that payment must be received by us before the 60-day due process period expires or we will report the debt to TOP.

9. Debtor alleges non-receipt of initial overpayment notice

If a debtor alleges never receiving the initial overpayment notice, proceed as follows:

a. PC/TSC action

  • Request from the debtor

    • a statement regarding non-receipt of the notice, and

    • their current address and telephone number.

  • Provide the address and telephone number of the FO that services the debtor.

  • Forward the material to the FO annotated "Necessary Action TOP/Credit Bureau Case Do Not Backlog."

  • Explain to the debtor that TRO will continue to apply unless we can confirm their allegation.

b. FO action

Request from the debtor

  • a statement regarding non-receipt of the notice

  • their current address and telephone number.

Request the claims folder if not currently available, in the FO as the result of a folder review request (see SI 02220.012E.4 in this section),

Review the claims folder to determine if the notice was returned as undeliverable.

If the claims folder is in the FO as the result of a folder review request check for an undeliverable notice, see SI 02220.012E.4.

Review the claims folder to determine if the notice was returned as undeliverable.

  1. 1. 

    Not returned undeliverable

    If there is not evidence to support the debtor's allegations, advise the debtor accordingly (by telephone, if possible):

    • Explain that since there is no evidence the notice was returned as undeliverable by the post office, we must proceed on the assumption the notice was received,

    • Document the folder with any debtor contact information.

  2. 2. 

    Returned undeliverable

    If returned undeliverable, verify we did not mail a subsequent notice.

    1. a. 

      Subsequent notification

      If we mailed a subsequent notice, advise the debtor (by telephone, if possible) of the date we sent the new notice.

    2. b. 

      No subsequent notification

      If we did not mail a subsequent notice, the debtor has the right to a full administrative review process.

      Therefore,

      • Send an initial overpayment notice to the debtor's current address, and overlay the old notice date with the new notice date using the UOSD screen in Direct SSR Update (see MS 00304.006).

      • If the debtor is in the FO, give them the initial overpayment notice.

      • If there is a disposition code on the SSR (e.g., DB, DC, DM, or M TAC), delete the old disposition code by completing the MSSICS Add/Change/Delete Overpayment Decisions (UODC) screen to avoid an excess decision (see MS 00304.007).

The new notice date will overlay the old and an unresolved overpayment will be computed.

NOTE: 

The above action will delete the debt from the TRO program until such time the debt becomes delinquent and meets all TRO selection criteria.

10. Report of death

For a report of death, follow this procedure:

a. FO/TSC action

If the FO/TSC is informed the debtor is deceased:

  • Obtain proof of death as required by GN 00304.001.

  • Input the death report via the Death Information Processing System (DIPS).

  • Post the following information to the SSR

    • passing details, and

    • the debt is no longer collectible (if appropriate).

b. PC action

If the PC is informed the debtor is deceased;

  • Obtain proof of death as required by GN 00304.001

  • Input the death report via the Death Information Processing System (DIPS).

  • Input the death details using the Stop Offset (TRSCO) screen.

Access to the TRSCO screen is requested from the Debt management Menu (DMMU) function number 12 - Treasury Offset Menu (TRMU) screen. This input will delete the debtor from TOP (see MS 01114.002 and MS 01114.003).

Conduct any estate development in accordance with SI 02220.045.

11. Report of bankruptcy action

If the debtor alleges a bankruptcy petition is pending or the debt was discharged in bankruptcy, obtain a copy of the petition or discharge order.

  1. a. 

    Pending bankruptcy petition

    • Input the allegation via the UOSD screen (see MS 00304.006 and SM 01311.421) selecting BANKRUPTCY DECISION PENDING (and the system will build a suspend billing indicator of L).

    • Process the petition or discharge order in accordance with SI 02220.040.

  2. b. 

    Bankruptcy discharge

    Review a copy of the discharge to confirm the SSA debt has been discharged,

    If YES:

    • Select CHANGE on the Add/Change/Delete UODC screen in Direct SSR Update (see MS 00304.007).

    • Change the decision, if present, to an UNCOLLECTABLE (see MS 00304.008) (N/NT TAC) decision to prevent any further collection activity (see SM 01311.280).

    If a suspend billing code is present, delete the suspend billing code using the UOSD screen (see MS 00304.006).

    If NO:

    • The SSA debt is not listed on the discharge. Make no system input.

    • Process the case in accordance with SI 02220.040.

E. Handling post-offset or post certification inquiries

SSA will receive some inquiries after certification of cases to Treasury or after actual offset has occurred. In these situations, certification to Treasury may have been an incorrect action. This section explains how to handle specific post-offset and post-certification inquiries.

1. Allegation of pending protest or waiver request

If a debtor alleges they filed a protest or requested waiver but never received a decision, proceed as follows.

Obtain an SSID query.

  1. a. 

    If there is a pending waiver, an appeals code or suspend billing code posted, but no decision made and released, a determination must be completed (see SI 04070.010B)

    Follow these steps:

    Step 1 - address the refund.

    • Refund any amount offset by Treasury via A-OTP (see SM 01901.001). This is known as an Agency Refund.

    • Notify Treasury of the refund.

    • Input the Agency Refund using the Correct Offset Amount (TRCA) screen by

      • accessing the Debt Management Menu (DMMU)

      • selecting function number12-Treasury Offset Menu (TRMU) screen (see MS 01114.005).

    • Resolve the overpayment caused by the A-OTP with a Z TAC by

      • completing the UOPD on the Direct SSR Update screen, and

      • for a terminated record, select INCORRECT OVERPAYMENT;

      • for payment status N, select UNCOLLECTIBLE to post an N TAC (see MS 00304.008).

    Step 2 - Develop the missing protest by looking for:

    • an SSA-632-BK,

    • a letter from the debtor or their representative, or

    • a Form SSA-795 in FO records or in the claims folder (see SM 01201.205 through SM 01201.235 for SSI folder retrieval instructions).

    Step 3 - Process the waiver or protest in accordance with GN 02250.002.

    If the waiver is approved, see MS 00304.007G and MS 00304.007H and:

    • change the waiver request to a waiver approval by completing the Direct SSR Update Waiver (UOWV) screen and

    • delete the suspend billing code, if present.

    If the waiver is not approved:

    • Document the waiver denial by changing the waiver request to a waiver denial by completing the UOWV screen (see MS 00304.009).

    • Request a refunds of the overpayment.

    If the debtor cannot refund the overpayment, request the debtor make installment payments.

    If the debtor cannot make installment payments, add a DB or DC TAC by selecting UNWILLING/UNABLE TO REPAY decision on the UOPD screen (see MS 00304.008).

    IMPORTANT: The FO processes all TRO refunds via Automated One Time Payment (A-OTP) (see SM 01901.001).

  2. b. 

    If the waiver was previously denied as an unfavorable reconsideration or waiver decision:

    • Advise the debtor that since the issue is resolved, TRO was appropriate.

    • Provide debtor with a copy of the waiver decision, if requested.

    • Do not refund any amounts offset by Treasury.

  3. c. 

    If there are no records available but the debtor still indicates a prior protest was filed,

    Develop the allegation by looking for an unprocessed SSA-632-BK, letter or SSA-795 in FO records or in the claims folder.

    • If found, follow SI 02220.012E.1.a.

    • If none found, advise the debtor the TRO was appropriate and do not refund any amounts offset by Treasury.

2. Request for waiver

  1. a. 

    If a request for waiver is received, proceed as follows:

    • Obtain an SSA-632-BK in accordance with current instructions in GN 02250.002.

    • Input the request for waiver by completing the UOWV screen in Direct SSR Update (see MS 00304.009).

  2. b. 

    If TRO recouped the entire debt (i.e., the debt balance is zero), proceed as follows:

    • Follow GN 02250.002 to process the waiver.

    • Consider a waiver on the entire overpayment amount during development.

    • Advise the debtor that refund of the amount offset will be made only if the waiver is approved.

    • If the waiver is approved (partially or fully), process the refund as in SI 02220.012E.1 in this section.

    • Request the DMS PC to remove the refund from the SSR, if necessary.

  3. c. 

    If TRO partially recouped the debt, proceed as follows:

    • Consider waiver on the full overpayment amount.

    • Follow GN 02250.002 to process the waiver.

    • Refund any paid amount due via A-OTP if waiver is approved (partially or fully). Refund any amount offset by Treasury. Process the refund as in SI 02220.012E.1 in this section.

    • Request the DMS PC to remove the refund from the SSR, if necessary.

3. Request for installment payments

When a request for installment payments is received, proceed as follows:

  1. a. 

    If an installment agreement was negotiated prior to certification and payment was made in accordance with that agreement but Treasury offset still occurred, proceed as follows:

    • Refund any amount offset by Treasury via A-OTP (see SM 01901.001). This is known as an Agency Refund and we must notify Treasury about the refund. Input the Agency Refund using the Correct Offset Amount (TRCA) screen which is requested from the Debt Management Menu (DMMU) function number 12-Treasury Offset Menu (TRMU) screen (see MS 01114.005).

    • Resolve the overpayment caused by the A-OTP. Complete the Direct SSR Input Overpayment Decisions (UOPD) screen by selecting INCORRECT OVERPAYMENT (Z TAC for terminated records) or UNCOLLECTIBLE (N TAC for RIC G records). See MS 00304.008.

    • Request the DMS PC to remove the refund from the SSR, if necessary.

    • Add an installment agreement decision (G TAC) by completing the UOPD screen selecting RECOVER BY INSTALLMENTS. (See MS 00304.008)

  2. b. 

    If the request is made after certification, proceed as follows:

    • Establish the agreement on the SSID per SI 02220.025.

    • Advise the debtor that the debt will remain in TRO until it is completely recovered. Explain that SSA will not refund any offset amount paid (unless excess collection, see SI 2220.012F.6)

4. Excess collection

Excess collections occur when the total amount of voluntary payments and offsets exceed the debt amount (see SM 01310.415 and SM 01310.420). For example, when a certified debtor enters into an installment agreement and fully refunds the debt after certification, an excess collection would occur if Treasury offset for the full amount of the debt. This causes the system to compute an excess decision (see SM 01311.634).

Refund the excess collection to the TRO debtor using existing instructions for A-OTP (see SM 01901.001).

  • If the offset caused the excess collection, process the refund as in SI 02220.012E.1 in this section.

  • If the voluntary remittance caused the excess collection, repay the excess to the debtor but Do Not Input an Agency Refund.

Request the DMS PC to remove the refund from the SSR, if necessary.

5. Erroneous offset to a joint taxpayer

When couples file joint tax returns and the party who is not an SSA debtor wants to receive their portion of the refund, advise the person to the local IRS office at 1-800-829-1040. This is known as an “injured spouse claim” which IRS alone can adjudicate. Advise that any refund must be made by IRS, not SSA.

No systems input is necessary.

6. Allegation of bankruptcy action

If the debtor alleges a bankruptcy petition is pending or the debt was discharged in bankruptcy:

  • obtain a copy of the petition or discharge the order.

  • Input the allegation via the UOPD screen (see MS 00304.008 and SM 01311.220) selecting BANKRUPTCY to post a MS TAC to the SSR.

  • Process the petition or discharge order in accordance with SI 02220.040.

If the debtor alleges the debt has been discharged in a bankruptcy judgement, ask the debtor to submit a copy of the discharge. Process as follows:

If the SSA debt has been discharged,

  • select CHANGE on the Add/Change/Delete UODC screen in Direct SSR Update (see MS 00304.007)

  • change the decision (including MS TAC) if present, to a UNCOLLECTIBLE (see MS 00304.008) (N TAC) decision to prevent any further collection activity (see SM 01311.280). If a MS TAC is present, change the MS TAC to an N TAC to prevent further collection activity.

If the SSA debt is not listed on the discharge, process the case in accordance with SI 02220.040.

F. Process - undeliverable ECO notice

Undeliverable External Collections notices the United States Postal Services (USPS) cannot deliver are handled differently than other returned SSA items.

Most of these undeliverable notices are handled by the mail room in PC7 ODO by scanning the barcodes on the notices using the TRUN screen (see MS 01114.008). If scanning is not possible or the notices are returned to another location, the notices are input using the TRRN screen (see MS 01114.009).

An undeliverable pre-offset notice is recorded on the ECO Master (see MS 01114.007) and will stop any referrals to Treasury, credit bureau reporting, and Administrative Wage Garnishment.

If referral has already been made, an update is sent to Treasury to remove the debt from TOP. ECO will request an address from the Address Verification Contractor (see SI 02220.012A.4 in this section).

G. Examples

Following are case examples of common post-offset and post-certification situations.

1. Timely protest resolved prior to certification

A debtor contacted us in September and provided documents they believed to prove the debt does not exist. In November, the FO advised them that their case was reviewed, and the overpayment does exist. The debtor has taken no further action until contacting us in early February to say their rapid refund was refused.

Explain that our referral to Treasury for collection was proper. If there is a balance after the Treasury offset and the debtor now wishes to pay that balance via full refund or negotiate an installment agreement, we will accept it. We will not return the offset funds to the debtor unless the total repaid funds exceed the amount of the overpayment, or the debtor requests waiver which is subsequently approved.

2. Alleged non-receipt of pre-offset notice

a. Undeliverable notice posted to TOP

A debtor calls us in March complaining that Treasury informed them $500 of their refund was offset to repay a debt to SSA. They claim never to have received the pre-offset notice.

The TOP query (see MS 01114.007) shows an undeliverable notice posted on March 5. Explain both the TRO process and the existing overpayment to the debtor. Also explain that we received the returned notice from the post office too late to stop the offset, but we will take action to refund the money withheld by Treasury if the debtor wishes it. If the debtor wants the money returned, establish how they wish to repay. Tell the debtor we will refer their debt to Treasury again if they become delinquent in repaying.

b. No undeliverable notice entry on TOP

The same situation in SI 02220.012G.2.a, except the TOP query (see MS 01114.007) does not have an undeliverable notice entry.

Explain that we have a record of all notices returned as undeliverable by the Postal Service and their notice was not returned. When the notice has not been returned, we must assume that it was delivered and proceed under the provisions for debt collection under TRO. Explain to the debtor that we must keep the money collected by Treasury unless the debtor can establish:

  1. 1. 

    the debt does not exist; or

  2. 2. 

    they are not liable for repaying the debt; or

  3. 3. 

    recovery of the debt is waived; or

  4. 4. 

    they provide clear and convincing evidence that the letter was never delivered.

The debtor may pursue any of these options, but no money will be refunded unless SSA reaches a decision in the debtor's favor based on the information they provide.


To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0502220012
SI 02220.012 - Collection of title XVI overpayments by Tax Refund Offset (TRO) - 02/20/2025
Batch run: 05/08/2025
Rev:02/20/2025