Spodek Law Group

transfer of ownership civil money penalty tocmp

The USDA is permitted to asses a civil money penalty against a retailer when the retailer transfers or sells a store that has been permanently disqualified from the Supplemental Nutrition Assistance Program. This means that if a store owner was permanently disqualified from SNAP participation, the store owner will be fined a TOCMP when he sells or transfers the store.

The Food and Nutrition Act of 2008, as amended in 7 USC Section 2021 and Section 278 of Title 7 of the Code of Federal Regulations (CFR). Section 278.6(f)(2) reads: “in the event any retail food store…which has been disqualified is sold or the ownership thereof is otherwise transferred to a purchaser or transferee, the person or other legal entity who sells or otherwise transfers ownership…shall be subjected to and liable for a civil money penalty.”

In the event that you sell or transfer ownership of your store subsequent to your disqualification, you

will be subject to and liable for a CMP as provided by SNAP regulations Sections 278.6(f)(2), (3),

and (4). The amount of this sale or transfer CMP will be calculated based on SNAP regulations at

278.6(g).

You have the option of paying the penalty in one lump sum or in installments. This can be arranged with Centralized Receivables Service at the USDA. Their telephone number is 1-855-549-4285. You are able to make payments online using credit cards, bank checking or savings accounts. You also have the option of mailing a check to USDA – FNS, SNAP – RETAILER/WHOLESALER, P.O. Box 2411, Oshkosh, WI, 54903.

The penalty has to be paid in full or a payment plan must be established within 15 calendar days of receipt of the letter. The USDA starts to collect interest starting on the 30th calendar day after the notification letter was received by the retailer.

If the TOCMP is not made, the USDA may disclose information about the retailer to the public. When a retailer has been disqualified or sanctioned, the USDA reserves the right to disclose information about the retailer to the public. The USDA can use the retailer’s information, social security numbers and EIN’s to collect and report additional information. The USDA can disclose information to other federal and state agencies, and private collection companies in order to collect debts owed. The USDA can refer debts to the Treasury Department for administrative or tax offsets or can refer matters to the Department of Justice for litigation. The USDA can refer the retailer to consumer reporting agencies as per the Fair Credit Reporting Act.

A retailer can submit a written request for review to the Chief Administrative Review Branch of the USDA in Alexandria, Virginia. The request for review must be submitted and postmarked by the 10th calendar day after the notification letter is received by the retailer. If the 10th day falls on a weekend or holiday, the due date is the next day that is not a weekend or holiday.

The USDA will work with you to work out a payment plan, however they have little discretion and can only work within the boundaries of the regulations. The longest payment plan they can offer is over 5 years, which paid monthly is 60 months. They are not able to use discretion to reduce the amount of the CMP, although they can reduce it a little in a payment plan. Any amount of the CMP that is “forgiven” is counted as taxable income and the individual will have to pay income taxes on that amount.

Interest

Typically the interest rate charged by the USDA is 1% on the CMP when you enter into a payment plan. The payment plan must be shorter than the period of disqualification for which the CMP is a substitute. If for example, if the disqualification was for a period of 6 months, then the payment plan to pay off the CMP is 6 months, with 1% interest. The amount if interest is subject to change and is determined by the USDA.