B-10614 August 26, 1940
B-10614: Aug 26, 1940
Sir: Reference is made to letter from the Commissioner of Internal Revenue. 1940...................... .46 $10.22 Total liability...... $23.94 "Delinquency interest will continue to accreu on the unpaid assessed balances of $12.92 and $9.76. To whom the taxes involved were listed for collection. Bridge is eligible for railroad unemployment insurance benefits. The matter was referred to the Railroad Retirement Board with a view to effecting an offset. A copy of which is enclosed for your information. "It will be appreciated if you will take the necessary stedp to withhold from any funds due Mr. "Your kindness in advising this Bureau of your action in the matter will also be appreciated.".
B-10614 August 26, 1940
The Honorable, The Secretary of the Treasury.
Reference is made to letter from the Commissioner of Internal Revenue, dated February 8, 1940, A&C:Col:0, as follows:
"It si deemed advisable to bring to your attention the indebtedness to the United States of A.L. Bridge, 1007 14th Street, Denver, Colorado, for the following unpaid taxes and interest:
Taxable Year 1937
Unpaid assessed balanc.................$12.92 Delinquency interest computed to February 29, 1940...................... .80 $13.72
Taxable Year 1938
Unpaid assessed balance................$ 9.76 Delinquency interest computed to February 29, 1940...................... .46 $10.22
Total liability...... $23.94
"Delinquency interest will continue to accreu on the unpaid assessed balances of $12.92 and $9.76, at the rate of six per cent per annum, from February 29, 1940, to the date of payment.
"The Collector of Internal Revenue, Denver, colorado, to whom the taxes involved were listed for collection, has been unable to make collection. Since Mr. Bridge is eligible for railroad unemployment insurance benefits, the matter was referred to the Railroad Retirement Board with a view to effecting an offset. A letter dated February 1st has been received from the Railroad Retirement Board, a copy of which is enclosed for your information.
"It will be appreciated if you will take the necessary stedp to withhold from any funds due Mr. Bridge from the Government an amount sufficient to liquidate his income tax liabilities. Any amount so withheld should be covered into the Treasury as an internal revenue collection, with personal credit to Hon. Ralph Nicholas, Collector of Internal Revenue, Denver, Colorado, (indebtedness of Albert Lawrence Bridge).
"Your kindness in advising this Bureau of your action in the matter will also be appreciated."
A similar situation arose in 1937 in connection with the contemplated set- off of social security benefits against the income tax indebtedness of the estate of Theodore Heck, deceased, 104 State Street, Peoria, Illinois, and was the subject of consideration by the Treasury Department, the Social Security Board and this office. Enclosed herewith is copy of office letter of April 29, 1938, A-89228, to the Chairman of the Social Security Board, relative to the said matter, wherein was contained a suggested procedure for accomplishing the proposed set-off. This office is not informed whether in the final action taken by the Treasury in the matter some procedure was provided whereby set-off of social security benefits aginst internal revenue taxes could be made, but it is thought advisable to invite your attention to the said Heck case in connnection with the instant matter, in view of the similarity of the statutes involved in the two cases.
The provisions of section 207 of the Social Security Act, 49 stat. 624, referred to on page 3 of the said letter of April 29, 1938, and the comparable provisions of the Railroad Unemployment Insurance Act, 52 stat. 1104 (45 U.S.C. 360 (b)), appear to be, in practical effect, the same though stated in different language; and such statement is true, also, of section 208 of the Social Secuity Act, 49 Stat. 625 (U.S.C. 407), quoted in the sai letter, and the comparable provisions of the Railroad Unemployment Insurance Act, 52 stat. 1097 (45 U.S.C. 352 (f)), with respect to the assignment, etc., of benefits under the two acts. It is noted that said section 207 of the Social Security Act has been amended by the act of August 10, 1939, 53 Stat. 1371 (42 U.S.C. 405 (i)), though the amendment does not appear to affect materially the question discussed in the said letter of April 29, 1938. As indicated in the said letter, it is the view of this office that social security benefits are subject to set- off against indebtedness to the United States; and for similar reasons it is the view of this office that railroad unemployment insurance benefits likewise are subject to set-off in the absence of any statutory provision clearly expressing a legislative intent to preclude such set-off. However, the question of whether there should be a withholding of benefits under the Railroad Unemployment Insurance act for application to indebtedness of the beneficiaries under said act for internal revenue taxes is primarily one for administrative consideration and for final determination by your Department and the Railroad Retirement Board, in view of the fact that is primarily the function of the treasury Department to collect internal revenue taxes. It is believed that the procedure suggested in the enclosed letter as to set-off of social security benefits would be equally applicable to set-off of railroad unemployment insurance benefits if the administrative offices concerned determine to take such action.
I shall appreciate being advised of the action taken in this matter.
Acting Comptroller General of the United States.