(a) General effect of 31 U.S.C. 3711. In accordance with 31 U.S.C.
3711 and applicable regulations, claims by the Office against an
individual for recovery of an overpayment under this part not exceeding
the sum of $100,000, exclusive of interest, may be compromised, or
collection suspended or terminated, where such individual or his or her
estate does not have the present or prospective ability to pay the full
amount of the claim within a reasonable time (see paragraph (c) of this
section), or the cost of collection is likely to exceed the amount of
recovery (see paragraph (d) of this section), except as provided under
paragraph (b) of this section.
(b) When there will be no compromise, suspension, or termination of
collection of a claim for overpayment. (1) In any case where the
overpaid individual is alive, a claim for overpayment will not be
compromised, nor will there be suspension or termination of collection
of the claim by the Office, if there is an indication of fraud, the
filing of a false claim, or misrepresentation on the part of such
individual or on the part of any other party having any interest in the
claim.
(2) In any case where the overpaid individual is deceased:
(i) A claim for overpayment in excess of $ 5,000 will not be
compromised, nor will there be suspension or termination of collection
of the claim by the Office if there is an indication of fraud, the
filing of a false claim, or misrepresentation on the part of such
deceased individual; and
(ii) A claim for overpayment, regardless of the amount, will not be
compromised, nor will there be suspension or termination of collection
of the claim by the Office if there is an indication that any person
other than the deceased overpaid individual had a part in the
fraudulent action which resulted in the overpayment.
(c) Inability to pay claim for recovery of overpayment. In
determining whether the overpaid individual is unable to pay a claim
for recovery of an overpayment under this part, the Office shall
consider the individual's age, health, present and potential income
(including inheritance prospects), assets (e.g., real property, savings
account), possible concealment or improper transfer of assets, and
assets or income of such individual which may be available in enforced
collection proceedings. The Office will also consider exemptions
available to such individual under the pertinent State or Federal law
in such proceedings. In the event the overpaid individual is deceased,
the Office shall consider the available assets of the estate, taking
into account any liens or superior claims against the estate.
(d) Cost of collection or litigative probabilities. Where the
probable costs of recovering an overpayment under this part would not
justify enforced collection proceedings for the full amount of the
claim, or where there is doubt concerning the Office's ability to
establish its claim as well as the time which it will take to effect
such collection, a compromise or settlement for less than the full
amount may be considered.
(e) Amount of compromise. The amount to be accepted in compromise
of a claim for overpayment under this part shall bear a reasonable
relationship to the amount which can be recovered by enforced
collection proceedings, giving due consideration to the exemption
available to the overpaid individual under State or Federal law and the
time which collection will take.
(f) Payment. Payment of the amount the Office has agreed to accept
as a compromise in full settlement of a claim for recovery of an
overpayment under this part shall be made within the time and in the
manner set by the Office. A claim for the overpayment shall not be
considered compromised or settled until the full payment of the
compromised amount has been made within the time and manner set by the
Office. Failure of the overpaid individual or his or her estate to make
such payment as provided shall result in reinstatement of the full
amount of the overpayment less any amounts paid prior to such default.
