1. a. 

   Advise the beneficiary of the:

   • •

     Tax amount refunded;

   • •

     Amount which should have been refunded;

   • •

     Amount and reason for the excess refund; and

   • •

     Excess refund will be withheld from his current benefit(s).

     Do not include the due process notice or SSA appeal language since it is an IRS matter and not subject to these SSA processes.

2. b. 

   Recover the excess refund amount as follows:

   • •

     Withhold (manually until the system is revised to handle these cases) the excess refund amount from the current monthly benefits.

     Compute the tax due on the benefit from which the refund is recovered before withholding the excess tax refund.

   • •

     Credit the amount withheld to recover the excess refund to PHUS as a tax withheld. (ETD is date the excess refund was paid.)

     Make this PHUS annotation after the full amount has been recovered or, if recovery extends over more than 1 calendar year,before the annual statement for each year is prepared. Limit the annotation to the amount recovered in the year for which the statement is due.

   • •

     Change the MBR alien tax field only to the extent, if any, it was changed by the excess tax refund (see D.1.).

     If payment stops before the repayment is complete, annotate the MBR, if appropriate, to show the repayment and take action as explained in b. and c.

Send the beneficiary a notice as explained in 1.; however, revise it to ask him to repay the excess refund.

Diary the case for 90 days.

In July 1995, SSA is advised that A (a nonresident alien) left France and had become a resident of Italy on March 20, 1995. Since A was a resident of a tax treaty country (Italy), action was taken to change his AWSC to “2” effective March 1995, stop the tax withholding and refund the taxes incorrectly withheld for March 1995 through June 1995 ($25.50 a month).

In September 1995, SSA notes that, due to a processing error, A's AWSC was changed effective February 1995 and he was issued a tax refund of $127.50, rather than $102.00.

A is advised of the excess tax refund as follows:

In August 1995, we sent you a check for $127.50. This was a refund of the Federal income taxes we withheld from your Social Security benefits for February 1995 through June 1995. However,since you were not a resident of the United States or a country with which the United States has a tax treaty prohibiting the taxation of Social Security benefits when you were paid the February 1995 benefit, we should not have refunded the tax for that month. We should have sent you a check for $102.00. Therefore, we sent you $25.50 too much.

We will recover the $25.50 by withholding it from the payment you would normally receive about October 3. The check you receive will be for $74.50. After that you will receive your regular monthly benefit.

Action is taken to recover the $25.50 excess tax refund from the MBC of $100.00. A's check for September 1995 is for $74.50. PHUS is annotated to show a tax withheld of $25.50 (ETD August 1995). The MBR is corrected to show an AWSC of 5 for 2/95.

In June 1995, SSA is notified that E (a nonresident alien) moved from France and became a resident of Italy on April 21, 1995. Action is taken to change her address and refund the taxes ($51.00 each month) which were incorrectly withheld from her April and May 1995 benefits. In August 1995, her entitlement terminates because of her marriage on August 10, 1995. At that time,it is noted that she was paid a tax refund of $153.00, rather than $102.00, in July 1995.

She is advised of excess tax refund as follows:

In July 1995, we sent you a check for $153.00. This was a refund of the Federal income taxes we withheld from your Social Security benefits for April and May 1995. We refunded these taxes because you were a resident of Italy which has a tax treaty with the United States exempting residents from the tax withholding. Since we deducted $102.00 too much for this period, we should have sent you a check for that amount. Therefore, we sent you $51.00 too much.

You should refund this amount within 30 days. Please make your check or money order payment to “Social Security Administration, Claim No. XXX-XX-XXXXE,” and send it to us in the enclosed envelope.

E sends SSA a check for $51.00. PHUS is annotated to show an additional tax withheld of $51.00 (ETD- July 1995). No change is made to her MBR alien tax fields since excess tax refund was not reflected on the MBR (i.e., only the AWSC and AMWA for April and May 1995 were changed by the refund).