Offset of Tax Refund Payments To Collect State Income Tax Obligations

Under provisions of the Internal Revenue Service Restructuring and Reform Act of 1998, the Federal tax refund of a taxpayer who owes a past-due, legally enforceable State income tax obligation may be reduced, or offset, by the amount owed by the taxpayer. The funds offset from the taxpayer's Federal tax refund are forwarded to the State that reported the past-due State income tax obligation. On December 20, 1999, the U.S. Department of the Treasury's Financial Management Service (FMS) published a notice of proposed rulemaking in the Federal Register by cross-reference to an interim rule published in the Federal Register on the same day. This final rule adopts the interim rule without change.