To amend title 31, United States Code, to allow certain local tax debt to be collected through the reduction of Federal tax refunds.

Directs the Secretary of the Treasury to reduce the federal tax refund of any taxpayer who owes a past-due, legally enforceable tax obligation to a local government by the amount of such obligation. Requires notice to the taxpayer of the refund reduction.

Amends the Internal Revenue Code to permit disclosure of taxpayer information to agencies of states requesting refund offsets for tax debts owed to local governments.