If an agency holds a debtor's firm written offer of compromise which is substantial in amount and the agency is uncertain as to whether the offer should be accepted, it may refer the offer, the supporting data, and particulars concerning the claim to the General Accounting Office or to the Department of Justice. The General Accounting Office or the Department of Justice may act upon such an offer or return it to the agency with instructions or advice. § 103.9 Restrictions.

Neither a percentage of a debtor's profits nor stock in a debtor corporation will be accepted in compromise of a claim. In negotiating a compromise with a business concern consideration should be given to requiring a waiver of the tax-loss-carry-forward and tax-losscarry-back rights of the debtor.

PART 104-STANDARDS FOR SUSPENDING OR TERMINATING COLLECTION ACTION

Sec.

104.1 Scope and application.

104.2 Suspension of collection activity. 104.3 Termination of collection activity. 104.4 Transfer of claims.

AUTHORITY: The provisions of this Part 104 issued under sec. 3, 80 Stat. 309; 31 U.S.C. 952.

SOURCE: The provisions of this Part 104 appear at 31 F.R. 13383, Oct. 15, 1966, unless otherwise noted.

§ 104.1 Scope and application.

The standards set forth in this part apply to the suspension or termination of collection action pursuant to section 3(b) of the Federal Claims Collection Act of 1966, 80 Stat. 309, on claims which do not exceed $20,000 exclusive of interest. The head of an agency or his designee may suspend or terminate collection ac

tion under this part with respect to claims for money or property arising out of activities of his agency prior to the referral of such claims to the General Accounting Office or to the Department of Justice for litigation. The Comptroller General or his designee may exercise such authority with respect to claims referred to the General Accounting Office prior to their further referral for litigation.

§ 104.2 Suspension of collection activity.

Collection action may be suspended temporarily on a claim when the debtor cannot be located after diligent effort and there is reason to believe that future collection action may be sufficiently productive to justify periodic review and action on the claim having consideration for its size and the amount which may be realized thereon. The following sources may be of assistance in locating missing debtors: Telephone directories; city directories; postmasters; drivers' license records; automobile title and license records; state and local governmental agencies; district directors of Internal Revenue; other Federal agencies; employers, relatives, friends; credit agency skip locate reports. Suspension as to a particular debtor should not defer the early liquidation of security for the debt. Every reasonable effort should be made to locate missing debtors sufficiently in advance of the bar of the applicable statute of limitations, such as Public Law 89-505, 80 Stat. 304, to permit the timely filing of suit if such action is warranted. If the missing debtor has signed a confess-judgment note and is in default, referral of the note for the entry of judgment should not be delayed because of his missing status. Collection action may be suspended temporarily on a claim when the debtor owns no substantial equity in realty and is unable to make payments on the Government's claim or effect a compromise thereof at the time but his future prospects justify retentions of the claim for periodic review and action and (a) the applicable statute of limitations has been tolled or started running anew or (b) future collection can be effected by offset notwithstanding the statute of limitations. § 104.3

ity.

Termination of collection activ

The head of an agency or his designee may terminate collection activity and consider the agency's file on the claim closed under the following standards:

(a) Inability to collect any substantial amount. Collection action may be terminated on a claim when it becomes clear that the Government cannot collect or enforce collection of any signifilcant sum from the debtor having due regard for the judicial remedies available to the Government, the debtor's future financial prospects, and the exemptions available to the debtor under State and Federal law. In determining the debtor's inability to pay the following factors, among others, may be considered: Age and health of the debtor; present and potential income; inheritance prospects; the possibility that assets have been concealed or improperly transferred by the debtor; the availability of assets or income which may be realized upon by enforced collection proceedings.

(b) Inability to locate debtor. Collection action may be terminated on a claim when the debtor cannot be located, there is no security remaining to be liquidated, the applicable statute of limitations has run, and the prospects of collecting by offset notwithstanding the bar of the statute of limitations is too remote to justify retention of the claim.

(c) Cost will exceed recovery. Collection action may be terminated on a claim when it is likely that the cost of further collection action will exceed the amount recoverable thereby.

(d) Claim legally without merit. Collection action should be terminated on a claim whenever it is determined that the claim is legally without merit.

(e) Claim cannot be substantiated by evidence. Collection action should be terminated when it is determined that the evidence necessary to prove the claim cannot be produced or the necessary witnesses are unavailable and efforts to induce voluntary payment are unavailing.

§ 104.4 Transfer of claims.

When an agency has doubt as to whether collection action should be suspended or terminated on a claim it may refer the claim to the General Accounting Office for advice. When a significant enforcement policy is involved in reducing a statutory penalty or forfeiture to judgment, or recovery of a judgment is a prerequisite to the imposition of administrative sanctions, such as the suspension or revocation of a license or the privilege of participating in a Government sponsored program, an agency may refer such a claim for litigation even though termi

nation of collection activity might otherwise be given consideration under § 104.3 (a) or (c). Claims on which an agency holds a judgment by assignment or otherwise will be referred to the Department of Justice for further action if renewal of the judgment lien or enforced collection proceedings are justified under the criteria discussed in this part, unless the agency concerned has statutory authority for handling its own litigation.

PART 105-REFERRALS TO GAO OR FOR LITIGATION

Sec.

105.1 Prompt referral.

105.2

105.3

105.4 105.5 105.6

Current address of debtor.
Credit data.

Report of prior collection actions.
Preservation of evidence.

Minimum amount of referrals to the

Department of Justice.

105.7 Referrals to GAO.

AUTHORITY: The provisions of this Part 105 issued under sec. 3, 80 Stat. 309; 31 U.S.C. 952.

SOURCE: The provisions of this Part 105 appear at 31 F.R. 13384, Oct. 15, 1966, unless otherwise noted.

§ 105.1 Prompt referral.

Claims on which collection action has been taken in accordance with Part 102 of this chapter and which cannot be compromised, or on which collection action cannot be suspended or terminated, in accordance with Parts 103 and 104 of this chapter, will be referred to the General Accounting Office in accordance with R.S. 236, as amended, 31 U.S.C. 71, or to the Department of Justice, if the agency concerned has been granted an exception from referrals to the General Accounting Office. Such referrals should be made as early as possible consistent with aggressive agency collection action and the observance of the regulations contained in this chapter and in any event well within the time limited for bringing a timely suit against the debtor.

§ 105.2 Current address of debtor.

Referrals to the General Accounting Office, and to the Department of Justice for litigation, will be accompanied by the current address of the debtor or the name and address of the agent for a corporation upon whom service may be made. Reasonable and appropriate steps will be taken to locate missing parties in all cases. Referrals to the General Accounting Office, and referrals to the Department of Justice for the institution

(a) Claims referred to the General Accounting Office, and to the Department of Justice for litigation, will be accompanied by reasonably current credit data indicating that there is a reasonable prospect of effecting enforced collections from the debtor, having due regard for the exemptions available to the debtor under State and Federal law and the judicial remedies available to the Government.

(b) Such credit data may take the form of (1) a commercial credit report, (2) an agency investigative report showing the debtor's assets and liabilities and his income and expenses, (3) the individual debtor's own financial statement executed under penalty of perjury reflecting his assets and liabilities and his income and expenses, or (4) an audited balance sheet of a corporate debtor.

(c) Such credit data may be omitted if (1) a surety bond is available in an amount sufficient to satisfy the claim in full, (2) the forced sale value of the security available for application to the Government's claim is sufficient to satisfy its claim in full, (3) the referring agency wishes to liquidate loan collateral through judicial foreclosure but does not desire a deficiency judgment, (4) the debtor is in bankruptcy or receivership, or (5) the debtor's liability to the Government is fully covered by insurance, in which case the agency will furnish such information as it can develop concerning the identity and address of the insurer and the type and amount of insurance coverage.

§ 105.4 Report of prior collection actions.

A checklist or brief summary of the actions previously taken to collect or compromise a claim will be forwarded with the claim upon its referral to the General Accounting Office or to the Department of Justice. If any of the administrative collection actions enumerated in Part 102 of this chapter have been omitted, the reason for their omission will be given with the referral. The General Accounting Office and the Department of Justice may return or retain claims at their option when there is insufficient justification for the omission of one or more of the administrative collection actions enumerated in Part 102 of this chapter.

§ 105.5

Preservation of evidence.

Care will be taken to preserve all files, records and exhibits on claims referred or to be referred to the General Accounting Office, or to the Department of Justice for litigation.

§ 105.6 Minimum amount of referrals to the Department of Justice.

Agencies will not refer claims of less than $400, exclusive of interest, for litigation unless (a) referral is important to a significant enforcement policy or (b) the debtor has not only the clear ability to pay the claim but the Government can effectively enforce payment having due regard to the exemptions available to the debtor under State or Federal Law and the judicial remedies available to the Government.

[35 F.R. 16397, Oct. 21, 1970]

§ 105.7 Referrals to GAO.

Referrals of claims to the General Accounting Office will be in accordance with instructions, including monetary limitations, contained in the General Accounting Office Policy and Procedures Manual for the Guidance of Federal Agencies.

This part together with Part 303, Release of Information, and Part 304, Delegations, of this chapter is published in compliance with Public Law 90-23, section (a) (1), 5 U.S.C. 552(a) (1), and constitutes a description of the Cost Accounting Standards Board.

§ 301.2 General statement of the Board's functions.

In general, the Board promulgates cost accounting standards designed to achieve uniformity and consistency in the cost accounting practices followed by defense contractors. It also promulgates rules and regulations for the implementation of such standards.

tendent of Documents, Government Printing Office. The published rules include:

(1) Procedural regulations which govern the formal and informal methods whereby persons dealing with the Board can present information to the Board to enable the Broad to promulgate rules, regulations, and cost accounting standards and to perform other duties for which it is responsible under section 719 of the Defense Production Act of 1950, as amended (50 U.S.C. App. 2168).

(2) Rules, regulations, and cost accounting standards which prescribe for relevant Federal agencies and for defense contractors and subcontractors various substantive and procedural requirements relating to cost accounting standards for use in connection with defense contracts.

(3) Regulations delegating matters to the Board's staff and describing how the public may deal with the Board in obtaining information.

(4) Board bylaws which govern Board membership, meetings, and formal action by Board vote.

(c) The Board may at its discretion respond to requests for interpretation of its rules, regulations, and cost accounting standards.

§ 301.4 Offices.

The Cost Accounting Standards Board's offices are located in the General Accounting Office Building, 441 G Street NW., Washington, DC 20548. The hours of business for the Board are 8:30 a.m. to 5 p.m., local time, Monday through Friday, excluding holidays observed by the Federal Government in Washington, D.C. § 301.5 Views and comments.

Proposed rules, regulations, or cost accounting standards of the Cost Accounting Standards Board shall be published for comment in the FEDERAL REGISTER. All parties affected thereby shall be afforded a period of not less than 30 days in which to submit to the Board their views and comments on the proposal; but in exceptional cases, the Board may provide for fewer than 30 days for the submission of views and comments. When fewer than 30 days are allowed, the Board notice inviting views and comments shall state the reasons therefor.