Social Security:

IRS Tax Identity Data Can Help Improve SSA Earnings Records

HRD-93-42: Published: Mar 29, 1993. Publicly Released: Mar 29, 1993.

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Pursuant to a congressional request, GAO reviewed whether the Internal Revenue Service's (IRS) collection of additional taxpayer identification information would help the Social Security Administration (SSA) identify owners of uncredited earnings.

GAO found that: (1) IRS has two sources of identity data that could assist SSA efforts to resolve its earnings identification problems; (2) IRS does not release tax refunds whenever a taxpayer uses an invalid surname or social security number (SSN) on his tax return; (3) when this happens, IRS sends a notice to the taxpayer asking him to compare the name and SSN used on his return with similar information on his social security card, and to report any errors; (4) IRS releases the refund after taxpayers respond to this notice; (5) IRS received about 776,000 responses from taxpayers on their identity problems, but after correcting its records when appropriate, IRS destroyed the responses; (6) the responses were not shared with SSA, so the value of this information for correcting SSA records could not be determined or estimated; and (7) spouses' names on tax returns can help SSA resolve an estimated 79,000 items, worth $556 million in uncredited earnings, in its suspense files each year.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: SSA conducted a study that indicated that about 1 percent of uncredited earnings could be reinstated to individual earnings accounts using IRS data. This projects to 21,000 wage items per year worth $136 million in earnings. On March 13, 1997, SSA obtained access to the necessary identity data. SSA expects to use IRS data in its Suspense Reinstatement Process when it processes tax year 1997 earnings reports.

    Recommendation: The Commissioners of Social Security and Internal Revenue should work together to conduct a study evaluating the extent to which additional uncredited earnings reports can be resolved by using data taxpayers send to IRS to obtain the release of their tax returns.

    Agency Affected: Social Security Administration

  2. Status: Closed - Implemented

    Comments: IRS holds up tax refunds owed taxpayers when problems exist with their identity (name and social security number on tax return do not match official identity records). When taxpayers reply to secure release of tax refunds, IRS updates its National Account Profile with new identity information. IRS provided SSA access to this file to test its value in resolving earnings items recorded in its suspense file. SSA studied 1000 randomly selected cases in the suspense file and found that the IRS data could increase wage postings by an estimated 21,000 items per year. These items have an estimated worth of $136 million. IRS has advised SSA that it will be able to provide access to this file by 1998.

    Recommendation: The Commissioners of Social Security and Internal Revenue should work together to conduct a study evaluating the extent to which additional uncredited earnings reports can be resolved by using data taxpayers send to IRS to obtain the release of their tax returns.

    Agency Affected: Department of the Treasury: Internal Revenue Service

  3. Status: Closed - Implemented

    Comments: IRS provides SSA spousal name information in its Individual Master Ferret File. On March 13, 1997, IRS authorized SSA to access spousal name information from this ferret file for use in resolving unidentified wage items. SSA's Office of Systems Requirements has implemented procedures to use spousal names to resolve unidentified wage items received in the annual wage reporting process.

    Recommendation: SSA should use the spouse name information IRS currently provides to SSA to supplement ongoing efforts to resolve unidentified earnings cases.

    Agency Affected: Social Security Administration

 

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