Internal Revenue Service (IRS) receipts have been handled differently over time (see A/C business process, “Exception Processing”):
- Prior to 2008 – Interest balances were not referred to the IRS, however, if there was an IRS receipt in undistributed they were applied in the following order:
- 222 IV-A (TANF)
- 444 IV-E (federal foster care)
- 555 non IV-E (state foster care)
- 111 issued to the custodial person
- Between 1/1/2008 – 1/7/2011 IRS receipts were automatically logged to interest with a 111 entry code and issued to the custodial person.
WARNING: These issuances should not be counted as an error or an overpayment, as it was Child Support Services (CSS) policy that was in effect during that time.
- Beginning 1/8/11 – IRS receipts are logged based on the category assignment (e.g., Conditionally Assigned, Never Assigned, etc.), of the interest balances. If no interest types are assigned, the receipt will automatically log to Undistributed.
Interest accrues on arrears balances over the life of a case. CSS applies payments to interest after all principal balances have been paid in full.
Note: For IRS Payments, OSIS may pay interest before principal if a principal balance is not eligible for IRS referral but the interest balance is eligible for IRS referral.