Transfer of Ownership Civil Money Penalty – TOCMP

The Consequences of Selling or Transferring a Store Disqualified from SNAP

The United States Department of Agriculture (USDA) has the authority to impose civil money penalties on retailers who sell or transfer a store that has been permanently disqualified from the Supplemental Nutrition Assistance Program (SNAP). This means that if a store owner is permanently disqualified from participating in SNAP, they will be fined a civil money penalty when they sell or transfer the store.

Legal Basis for Civil Money Penalties

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), grants the USDA the power to impose civil money penalties. According to Section 278.6(f)(2) of the CFR, if a retail food store that has been disqualified is sold or ownership is transferred, the person or legal entity selling or transferring ownership will be subject to and liable for a civil money penalty.

Calculation and Payment of Civil Money Penalties

If you sell or transfer ownership of your store after disqualification, you will be liable for a civil money penalty as outlined in SNAP regulations Sections 278.6(f)(2), (3), and (4). The amount of the penalty will be calculated based on SNAP regulations at 278.6(g).

You have the option to pay the penalty in one lump sum or in installments. To arrange a payment plan, you can contact the Centralized Receivables Service at the USDA by calling 1-855-549-4285. Payments can be made online using credit cards, bank checking or savings accounts. Alternatively, you can mail a check to USDA – FNS, SNAP – RETAILER/WHOLESALER, P.O. Box 2411, Oshkosh, WI, 54903.

The penalty must be paid in full or a payment plan must be established within 15 calendar days of receiving the notification letter. If the penalty is not paid, the USDA may disclose information about the retailer to the public.

Disclosure of Retailer Information

When a retailer is disqualified or sanctioned, the USDA reserves the right to disclose information about the retailer to the public. This includes using the retailer’s information, social security numbers, and EINs to collect and report additional information. The USDA can disclose information to other federal and state agencies, as well as private collection companies, in order to collect debts owed. Debts may also be referred to the Treasury Department for administrative or tax offsets, or to the Department of Justice for litigation. The retailer may also be referred to consumer reporting agencies in accordance with the Fair Credit Reporting Act.

Requesting a Review

If a retailer wishes to contest the penalty, they can submit a written request for review to the Chief Administrative Review Branch of the USDA in Alexandria, Virginia. The request must be submitted and postmarked by the 10th calendar day after receiving the notification letter. If the 10th day falls on a weekend or holiday, the due date is the next business day.

Payment Plan and Interest

The USDA is willing to work with retailers to establish a payment plan, but they have limited discretion and must adhere to the regulations. The longest payment plan they can offer is over 5 years, with monthly payments spread over 60 months. The USDA cannot reduce the amount of the civil money penalty, but they may be able to slightly reduce it within a payment plan. Any portion of the penalty that is forgiven is considered taxable income, and the individual will be required to pay income taxes on that amount.

Interest Rate

Typically, the USDA charges an interest rate of 1% on the civil money penalty when entering into a payment plan. The duration of the payment plan must be shorter than the period of disqualification for which the penalty is a substitute. For example, if the disqualification was for 6 months, the payment plan to pay off the penalty would be 6 months with 1% interest. The exact interest rate is determined by the USDA and is subject to change.