1.35.13. Administrative Waiver

(1) Purpose: To provide policy and guidance for requesting a waiver or the appeal of a denied waiver from the collection of delinquent non-tax debts including but not limited to:

• Erroneous payments of pay and allowances, travel, transportation or relocation expenses and allowances.

• An employee or former employee’s breach of an agreement for government funded training.

• An employee or former employee’s breach of an agreement for Student Loan Repayments.

(2) Audience: All IRS employees, former employees, personal administrators for estates of former IRS employees and IRS personnel that manage the administrative waiver program.

(3) Policy Owner: The CFO owns the policies herein.

(4) Program Owners: CFO Government Payables and Funds Management office and the Human Capital Office (HCO).

(5) Primary Stakeholders: The CFO, Chief Counsel and the HCO.

(6) Program Goals: To ensure that requests for waivers and the appeals of denied waivers of non-tax debts are resolved equitably and timely.

(1) A debt may only be waived for:

1. An erroneous payment of pay and allowances, travel, transportation or relocation expenses and allowances.

2. An employee's non-compliance with the terms of a relocation service agreement.

3. An employee’s non-compliance with the terms of a government funded training or student loan repayment program. See IRM 6.410.1, Learning and Education Policy.

(2) A waiver will not be granted where there is any proof of fraud, misrepresentation, fault or lack of good faith on the part of the debtor. Fault may exist if the debtor knew or should have known an error or omission existed. For example, the reimbursement of airport parking expenses in excess of the amount allowed under the Federal Travel Regulation and the underwithholding of health insurance premiums are situations in which the debtor should have known an error existed.

(3) To avoid enforced collection action, debtors must submit a waiver request no later than 15 days from the receipt of the debt letter sent to the debtor for an erroneous payment of pay and allowances, travel, transportation or relocation expenses and allowances, government funded training or student loan repayment.

(4) The debtor must provide a written justification for a waiver request along with supporting documentation, if any.

(5) The debtor must include the following information for both the initial waiver request and any appeal:

1. Debtor’s name

2. Debtor’s SEID

3. Amount of debt

4. Amount requested to be waived

5. Reason or justification for the waiver request or appeal

6. Receipts, vouchers and supporting documents redacted to omit any social security numbers or bank account numbers.

7. Any additional documentation that supports the waiver request.

(6) The IRS suspends collection of a debt during the waiver review process. All interest, penalty and administrative costs may continue to accrue and are added to the amount of the debt if the waiver request is denied.

(1) Debtors may submit a request to waive the collection of a debt, in whole or in part, arising out of erroneous payment of pay and allowances.

(2) Generally, waiver of an overpayment will not be approved if the debtor received a significant unexplained increase in pay or otherwise knew or reasonably should have known that an erroneous payment occurred and did not inquire or bring the matter to the attention of management.

(3) For additional information about the waiver process for pay and allowances, contact the Employee Resource Center (ERC).

(1) A debtor may submit a request to waive the collection of a debt, in whole or in part, arising from an erroneous payment of travel, transportation or relocation expenses and allowances.

(2) Travel Management reviews each waiver request to ensure the debtor provided all required documentation. If not, Travel Management contacts the debtor to request the additional information.

(3) Final approval authority is for either the CFO/DCFO or the Department of the Treasury, depending upon the dollar amount of the overpayment. The decision is based on the merits of each individual case.

(4) For additional information about the waiver process for travel, transportation or relocation expenses and allowances, contact Government Payables and Funds Management at: CFO.BFC.Debt.Collection.Helpdesk@irs.gov.

(1) A debtor may submit a request to waive the collection of a debt, in whole or in part, arising from a government funded training or student loan repayment.

(2) A debtor must detail any extenuating circumstances for consideration which prevented the employee from successfully fulfilling the terms of government funded training or student loan repayment programs.

(3) For additional information about the waiver process for Government Funded Training and Student Loan Repayments, contact Government Payables and Funds Management at: CFO.BFC.Debt.Collection.Helpdesk@irs.gov.

(1) A debtor has the right to appeal the decision of a disapproved waiver request.

(2) If either the IRS or the Department of the Treasury denies a waiver request, the office denying the request will advise the debtor of their right to appeal the denial.

(3) Suspension of debt collection action continues during the appeal process. All interest, penalty and administrative costs may continue to accrue. Should the official evaluating the appeal sustain the denial of the waiver, the IRS either initiates or resumes collection of the debt amount, including all accrued interest, administrative fees and penalties.

(4) The debtor must submit the appeal, in writing, no later than 60 calendar days after notification of denial of the waiver.

(5) The debtor must include the following in the written appeal:

1. The basis for the appeal.

2. A chronological order of the events surrounding the erroneous payments.

3. A statement regarding any mitigating factors.

4. The original request for a waiver.

5. The deciding official’s denial of the original waiver request.

6. The deciding official’s conclusion for the basis of the denial.

7. Copies of any personnel actions (e.g. promotions, demotions, step increases, etc.) that relate to the overpayment.

(6) A debtor, excluding Chief Counsel employees, may submit a written request appealing a disapproved waiver request for repayment of erroneous payment of pay and allowances as follows:

(7) Current and former Chief Counsel employees may submit a written request appealing a disapproved waiver request for repayment of erroneous payment of pay and allowances as follows:

(8) A debtor, including Chief Counsel employees, may submit a written request appealing a disapproved waiver request for repayment of erroneous payments of travel, transportation, relocation expenses and allowances as follows:

(1) There are no appeal rights for denied waivers of government funded training and student loan repayments.

(1) Waiver requests and appeals of denied waiver requests for which the claim is above a specific dollar amount are sent to the DASHR/CHCO, Department of the Treasury, for review and a decision to approve the waiver or the appeal. See tables in IRM 1.35.13.3, Waiver Request for Pay and Allowances; IRM 1.35.13.4, Waiver Request for Travel, Transportation, Relocation Expenses and Allowances and IRM 1.35.13.5, Waiver Request for Government Funded Training and Student Loan Repayments.

(1) Treasury Directive Publication 34-01, Section (b), Waiving Claims Against Treasury Employees for Erroneous Payments, states, "The heads of bureaus and the DASHR/CHCO shall maintain a register of waiver actions subject to Departmental review. The register must cover each fiscal year and be prepared annually by October 15th of each year for the preceding fiscal year."

(2) The IRS maintains three separate subsidiary registers as follows:

1. The chief, Austin Payroll Center, maintains a subsidiary register pertaining to waiver actions for pay and allowances that involve IRS employees referred to as Subsidiary Register 1.

2. The director, Travel Management, maintains a subsidiary register pertaining to waiver actions for travel, transportation or relocation expenses and allowances involving IRS employees referred to as Subsidiary Register 2.

3. The Associate Chief Counsel (Finance & Management) maintains a subsidiary register pertaining to waiver actions for pay and allowances, travel, transportation or relocation expenses and allowances involving Chief Counsel employees referred to as Subsidiary Register 3.

(3) Each subsidiary register must contain:

1. The total amount waived by the IRS or Chief Counsel.

2. The number and dollar amount of waiver applications granted in full.

3. The number and dollar amount of waiver applications granted in part and denied in part and the dollar amount of each.

4. The number and dollar amount of waiver applications denied in their entirety.

5. The number and dollar amount of the waiver applications referred to the DASHR/CHCO for initial action or for appeal.

6. The dollar amount refunded from a waiver action by the IRS or Chief Counsel.

7. The dollar amount refunded from a waiver action by the DASHR/CHCO or the assistant secretary for management.

(4) The chief, Austin Payroll Center; the director, Travel Management and the Associate Chief Counsel (Finance & Management) are responsible for forwarding their subsidiary register to the director, Government Payables and Funds Management, no later than October 15.

(5) The associate director, Austin Payroll Center; the director, Travel Management and the Associate Chief Counsel (Finance & Management) are responsible for retaining a written record of each waiver action listed in the subsidiary register for six years and three months after the close of the fiscal year in which the action was taken on the waiver. At a minimum, the written record must contain:

1. A summary of the events surrounding the erroneous payment.

2. Any written comments submitted by the debtor from whom collection is sought.

3. An account of the waiver action taken and the reasons for such action.

4. Any other pertinent information such as any action to refund amounts repaid.

(1) A debtor has the right to withdraw a debt waiver request at any time prior to a decision. A withdrawal of a debt waiver request does not prohibit the debtor from resubmitting the request at a later time. To avoid commencement of enforced collection action, the waiver request must be resubmitted within the period of time specified in the debt letter

(2) Should a debt waiver request be withdrawn, collection effort on the debt will either be initiated or resumed.

(1) If a petitioner for a waiver request believes he or she suffered legal wrong because of action of the Department of the Treasury, that petitioner is entitled to a judicial review of that action. This right, resulting from the Administrative Procedure Act of 1946 (P. L. 79-404, 60 Stat. 237), is codified at 5 USC Section 702. All administrative remedies must be exhausted prior to filing a suit with the U.S. District Court.