Social Security:

Resolving Errors in Wage Reporting

HRD-90-11: Published: Oct 17, 1989. Publicly Released: Oct 17, 1989.

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Pursuant to a congressional request, GAO reviewed the Social Security Administration's (SSA) efforts to reconcile cases in which employers reported lower employee wages to SSA than to the Internal Revenue Service.

GAO found that: (1) SSA telephoned employers that did not respond to SSA reconciliation letters and that had wage reporting differences of at least $500,000; (2) the telephone success rate was much less than estimated by two SSA studies because the study samples were not reliable or representative and the studies incorrectly attributed the resolution of some cases to telephone reconciliation, rather than to other activities; (3) SSA based its $500,000 threshold on the belief that such a threshold would target cases with the greatest potential for payoff; and (4) other characteristics, such as whether employers had received previous reconciliation letters or filed recent wage reports, could help predict probable success for reconciliation.

Recommendation for Executive Action

  1. Status: Closed - Not Implemented

    Comments: The recommendation is no longer applicable because SSA no longer plans to telephone employers under its wage reconciliation program. SSA said that it would reconsider the recommendation if it resumed the practice of telephoning employers.

    Recommendation: The Commissioner of Social Security should revise the characteristics considered in targeting employers that SSA will telephone to resolve wage-reporting problems. In addition to the amount of wages being reconciled, the Commissioner should emphasize characteristics such as whether: (1) SSA has previously located employers; or (2) employers have filed recent wage reports.

    Agency Affected: Social Security Administration


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