Social Security: Reconciliation Improved SSA Earnings Records, but Efforts Were Incomplete
HRD-92-81
Published: Sep 01, 1992. Publicly Released: Oct 14, 1992.
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Highlights
Pursuant to a congressional request, GAO reviewed the efforts of the Social Security Administration (SSA) and the Internal Revenue Service (IRS) to correct accuracy problems in SSA earnings records, focusing on: (1) SSA and IRS actions under their memorandum of understanding (MOU) and their adequacy; (2) whether SSA and IRS have met their MOU commitments; (3) the outcome of the reconciliation efforts; and (4) possible improvements to the wage-crediting process.
Recommendations
Matter for Congressional Consideration
| Matter | Status | Comments |
|---|---|---|
| Congress may wish to consider amending section 201(a) of the Social Security Act to require that revenues credited to the social security trust funds are based on the amount of social security taxes collected each year, including interest and penalties, and have the Secretary of the Treasury certify to the amount of social security taxes collected. |
Closed – Not Implemented
|
There are no plans to revise legislation needed to implement this recommendation. |
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Internal Revenue Service | To improve the process for reconciling differences in wage reports and employer reporting accuracy, the Commissioner of Internal Revenue should comply with all agreed-upon provisions of the MOU. IRS should contact all employers in cases referred by SSA under the terms of the MOU, eliminate any penalty tolerance that is not in accord with the MOU, and take prompt action to issue regulations to mandate the filing of W-2s within 30 days after a business terminates operations. |
Closed – Implemented
IRS regulations have been issued to require that businesses terminating operations in 1997 must file form W-2s for their employees with SSA within 1 month after filing their final Estimated Quarterly Tax Return with IRS. The penalty tolerance issue, however, remains unresolved with no indication of when, if ever, it may be settled.
|
| Social Security Administration | To improve the process for reconciling differences in wage reports and employer reporting accuracy, the Commissioners of Internal Revenue and Social Security should amend the MOU to ensure that reasonable efforts are made to contact employers whenever SSA does not have its reconciliation letters delivered. |
Closed – Implemented
IRS has made changes to its computer program to work undelivered cases referred by SSA this year. The new procedures will be reflected in the next revision to the MOU.
|
| Internal Revenue Service | To improve the process for reconciling differences in wage reports and employer reporting accuracy, the Commissioners of Internal Revenue and Social Security should amend the MOU to ensure that reasonable efforts are made to contact employers whenever SSA does not have its reconciliation letters delivered. |
Closed – Implemented
IRS has made changes to its computer program to work undelivered cases referral by SSA this year. The new procedures will be reflected in the next revision to the MOU.
|
| Social Security Administration | To improve the process for reconciling differences in wage reports and employer reporting accuracy, the Commissioner of Social Security should place more emphasis on identifying and addressing causes of employer problems in reporting wages. SSA should examine the clarity of its wage-reporting instructions and consider how it can better respond to employer wage-reporting questions, such as by providing a single contact point for employers. |
Closed – Implemented
SSA has taken a variety of actions that address this recommendation: (1) issuing new and revised publications; (2) implementing its own electronic bulletin board system for employers; (3) continuing education and public awareness campaigns; (4) sponsoring employer payroll conferences two times a year; and (5) improving systems for handling reconciliation cases.
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Topics
Federal agency accounting systemsFederal records managementFederal social security programsFinancial recordsIncome statisticsInteragency relationsPayroll recordsReporting requirementsSocial security taxesTax administration systems