By Haidee V. Eugenio
Variety Assistant Editor

TAXPAYERS and vendors will now be able to pay their debt to the cash-strapped government through the offsetting of their tax rebates or tax overpayments.
The Department of Finance adopted new regulations that establish procedures to be followed by all agencies submitting delinquent accounts payable for collection by Finance through tax offset procedures, as called for by Public Law 14-35.
Finance Secretary Eloy Inos, in a March 5 public notice, said the proposed regulations were adopted without modification and were published in this month’s Commonwealth Register.
The purpose of the regulations, according to Assistant Attorney General James R. Stump in a notice, is to aid the CNMI government in the collection of delinquent accounts receivables.
P.L. 14-35 provides the finance secretary with authority to offset debts owed to CNMI government agencies against any tax rebates and/or overpayments due to the debtor, and provides a structure for voluntary canceling of debts between the CNMI and individuals and entities.
The CNMI government is a significant economic enterprise and processes daily numerous payments to vendors and taxpayers, and receives significant payments of accounts payable.
The regulations state that “In order to provide the CNMI with additional flexibility in meeting the requirements of accounts payable and receivable, the Department of Finance has developed regulations that permit the offsetting of accounts receivable and payables when an individual/entity has balances in both of these accounts.”
But in order to avoid the violation of accounting principles and to ensure tracking of all offsets, this procedure is to be strictly limited to two types of offset procedures: voluntary and involuntary.
A voluntary offset is used when a taxpayer or entity agrees to allow Finance to offset accounts payable owed to the individual or entity from the CNMI by accounts receivable owed by the individual or entity.
The voluntary offset can be initiated either by the CNMI or the individual. It requires the completion of an approved voluntary offset agreement, among other things.
An involuntary offset is defined as an action undertaken by Finance unilaterally or at least at the request of another CNMI agency, to offset a tax overpayment or rebate due to a taxpayer by any accounts receivable or debts owed to the CNMI.