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Federal Register / Vol. 86, No. 38 / Monday, March 1, 2021 / Proposed Rules
obtain a current financial statement from the debtor, executed under penalty of perjury, that shows the debtors assets, liabilities, income and expense;
and f The CFO may compromise statutory penalties, forfeitures, or debts established as an aid to enforcement, and to compel compliance, when he or she determines that accepting the offer will serve the Agencys enforcement policy adequately, in terms of deterrence and securing compliance both present and future.
Subpart ESuspension or Termination of Collection Action 213.29

Amended
30. Amend 213.29 by removing penalty charges and adding penalties, in its place.
31. Amend 213.30 by:
a. Revising the section heading;
b. In paragraph c, adding the words or her after his; and c. Revising paragraphs d introductory text and e.
The revisions read as follows:

213.30 Standards for suspension of collection action.

d The CFO may suspend collection activities on debts of $100,000 or less during the pendency of a permissive waiver or administrative review when there is no statutory requirement and he or she determines that:

e The CFO will decline to suspend collection when he or she determines that the request for waiver or administrative review is frivolous, or that the debtor made it primarily to delay collection.
213.31

Amended
32. Amend 213.31 in the first sentence by removing the word penalty and adding penalties, in its place.
33. Amend 213.32 by revising the section heading and the introductory text to read as follows:

213.32 Standards for termination of collection action.

The CFO may terminate collection action on a debt when he or she determines that:

34. Revise 213.34 to read as follows:
213.34

Debts discharged in bankruptcy.

The CFO generally terminates collection activity on a debt discharged in bankruptcy, regardless of the amount.
USAID may continue collection activity, however, subject to the provisions of the
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Bankruptcy Code for any payments provided under a plan of reorganization.
The CFO will seek legal advice by the Office of the USAID General Counsel if he or she believes that any claims or offsets might have survived the discharge of a debtor.
Subpart FDischarge of Indebtedness and Reporting Requirements

35. Revise 213.35 to read as follows:

213.35 Discharging indebtedness general.

a Before discharging a delinquent debt also referred to as a close out of the debt, the CFO must take all appropriate steps to collect such debt, including as applicable, the following:
1 Administrative offset;
2 Tax-refund offset;
3 Offset of Federal salary;
4 Referral to private collection contractors;
5 Referral to Federal Departments or Agencies that are operating a debtcollection center;
6 Reporting delinquencies to creditreporting bureaus;
7 Garnishing the wages of a delinquent debtor; and 8 Litigation or foreclosure.
b The CFO will make a determination that collection action is no longer warranted and request that litigation counsel release any liens of record that are securing the debt.
Discharge of indebtedness is distinct from the termination or suspension of collection activity, and the Internal Revenue Code might apply. When the CFO suspends or terminates collection action on a debt, the debt remains delinquent, and USAID may pursue further collection action at a later date in accordance with the standards set forth in this part. When a debt is discharged in full or in part, further collection action is prohibited, and USAID must terminate debt-collection action.
36. Revise 213.36 to read as follows:
213.36 Reporting to Department of the Treasurys Internal Revenue Service.

Upon discharge of indebtedness, USAID must report the discharged debt as income to the debtor to the IRS in accordance with the requirements of 26
U.S.C. 6050P and 26 CFR 1.6050P1.
USAID may request Fiscal Service to file such a discharge debt report to the IRS
on the Agencys behalf.
37. Revise the heading for subpart G
to read as follows:

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Subpart GReferrals to the U.S.
Department of Justice 38. Amend 213.37 by revising the section heading and paragraph a to read as follows:

213.37 Referrals to the U.S. Department of Justice.

a The CFO, through USAIDs crossservicing agreement with Fiscal Service and by direct action, refers to DOJ for litigation all claims on which the Federal Government has taken aggressive collection actions but which could not be collected, compromised, suspended, or terminated. USAID makes such referrals as early as possible, consistent with aggressive Agency collection action, and within the period for bringing a timely suit against the debtor. Unless otherwise provided by DOJs regulations or procedures, USAID
refers for litigation debts of more than $2,500 but less than $1 million to DOJs Nationwide Central Intake Facility, as required by the instructions for the Claims-Collection Litigation Report CCLR. USAID shall refer debts of more than $1 million to the Civil Division at DOJ.

39. Revise the heading for subpart H
to read as follows:
Subpart HMandatory Transfer of Delinquent Debt to U.S. Department of the Treasury

40. Revise 213.38 to read as follows:

213.38 Mandatory transfer of debts to Department of the Treasurys Bureau of the Fiscal Servicegeneral.

a USAIDs procedures call for the transfer of legally enforceable debt to Fiscal Service 90 days from the date provided on the Agencys initial written demand-for-payment notice issued to the debtor. A debt is legally enforceable if the Agency has made a final determination that the debt, in the amount stated, is due and there are no legal bars to collection action. A debt is not considered legally enforceable for purposes of mandatory transfer to Fiscal Service if a debt is the subject of a pending administrative review process required by statute or regulation and collection action during the review process is prohibited.
b Except as set forth in paragraph a of this section, USAID will transfer any debt covered by this part that is more than 120 days delinquent to Fiscal Service for debt-collection services. A
debt is considered 120 days delinquent for purposes of this section if it is 120
days past due and is legally enforceable.
41. Amend 213.39 by:

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